DAIRY FARM
FARM
DAIRY
MANAGEMENT
MANAGEMENT
OCTOBER 2007
R.B. 2007-01
BUSINESS SUMMARY
NEW YORK STATE
2006
50th
Anniversary
1956-2006
Wayne A. Knoblauch
Linda D. Putnam
Jason Karszes
Department of Applied Economics and Management
Cornell University Agricultural Experiment Station
College of Agriculture and Life Sciences
Cornell University, Ithaca, New York 14853-7801
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committed to the maintenance of affirmative action
programs which will assure the continuation of such
equality of opportunity.
The Dairy Farm Business Summary and Analysis Project is
funded in part by:
For additional copies, please contact:
Linda Putnam
Cornell University
Department of Applied Economics and Management
305 Warren Hall
Ithaca, NY 14853-7801
E-mail: ldp2@cornell.edu
Fax:
607-255-1589
Voice: 607-255-8429
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© Copyright 2007 by Cornell University. All rights reserved.
Research Bulletin 2007-01
October 2007
Dairy Farm Management
Business Summary New York State 2006
Wayne A. Knoblauch*
Linda D. Putnam
Jason Karszes
Department of Applied Economics and Management
Cornell University, Ithaca, New York 14853-7801 USA
*Author phone: 607-255-1599
*Author e-mail: wak4@cornell.edu
Keywords:
BUSINESS ANALYSIS, DAIRY MANAGEMENT, FARM BUSINESS SUMMARY,
NEW YORK FARMS
JEL codes:
Q12, Q14
i
ABSTRACT
Business and financial records for 2006 from 240 New York dairy farm businesses are summarized
and analyzed. This analysis demonstrates the use of cash accounting with accrual adjustments to measure
farm profitability, financial performance, and costs of producing milk. Traditional methods of analyzing
dairy farm businesses are combined with evaluation techniques that show the relationship between good
management performance and financial success.
The farms in the project averaged 350 cows per farm and 23,083 pounds of milk sold per cow,
which represent above average size and management level for New York dairy farms. Net farm income
excluding appreciation, which is the return to the operator's labor, management, capital, and other unpaid
family labor, averaged $41,144 per farm. The rate of return to all capital invested in the farm business
including appreciation averaged 4.0 percent.
Differences in profitability between farms continue to widen. Average net farm income excluding
appreciation of the top 10 percent of farms was $322,100, while the lowest 10 percent was a negative
$183,853. Rates of return on equity with appreciation ranged from positive 16 percent to negative 27
percent for the highest decile and the lowest decile of farms, respectively.
Large freestall farms averaged the highest milk output per cow and per worker, the lowest total cost
of production and investment per cow, and the greatest returns to labor, management and capital. Farms
milking three times a day (3X) were larger, produced more milk per cow and had higher net farm incomes
than herds milking two times per day (2X). Operating costs per hundredweight of milk were $0.54 per
hundredweight higher for 3X than 2X milking herds, while output per cow was 4,153 pounds higher.
In
2006, farms supplementing the herd with bovine somatotropin (bST) attained higher rates of milk production
per cow, had larger herds and were more profitable than farms not supplementing with bST for most
measures of profitability. Farms adopting intensive grazing generally produced less milk per cow than nongrazing farms but had lower costs of production and higher profitability. One should not conclude that
adoption of these technologies alone were responsible for differences in performance.
ii
TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................................................1
Farms Included ........................................................................................................................................................1
Features ...................................................................................................................................................................1
Acknowledgments ...................................................................................................................................................1
2006 Regional Summary Publications.....................................................................................................................2
FIFTY YEARS OF NEW YORK STATE DAIRY FARM BUSINESS DATA...................................................................3
FOUR YEARS OF VARIABILITY ......................................................................................................................................3
ADJUSTING PROFIT, PRICE AND COSTS FOR INFLATION........................................................................................6
SUMMARY & ANALYSIS OF THE FARM BUSINESS ...................................................................................................8
Business Characteristics & Resources Used............................................................................................................8
Accounting Procedures ............................................................................................................................................9
Income Statement - Expenses ..................................................................................................................................9
Income Statement - Receipts .................................................................................................................................11
Profitability Analysis .............................................................................................................................................12
Farm & Family Financial Status ............................................................................................................................15
Cash Flow Summary & Analysis...........................................................................................................................18
Repayment Analysis ..............................................................................................................................................20
Cropping Program Analysis...................................................................................................................................21
Dairy Program Analysis.........................................................................................................................................24
Cost of Producing Milk .........................................................................................................................................28
Milk Income and Marketing Expense Breakdown ................................................................................................40
Capital & Labor Efficiency Analysis.....................................................................................................................42
Farm Business Charts ............................................................................................................................................44
Financial Analysis & Management........................................................................................................................46
Herd Size Comparisons .........................................................................................................................................48
SUPPLEMENTAL INFORMATION..................................................................................................................................61
Comparison for Farms That Buy All Feed Versus Farms That Grow Forages......................................................63
Comparisons by Type of Barn & Herd Size ..........................................................................................................65
Comparison of Farms by bST Usage .....................................................................................................................71
Comparison of Farm Business Summary Data, 1997-2006...................................................................................72
Farm Receipts & Expenses Per Cow & Per Hundredweight for Three
Levels of Milk Production & Three Herd Size Categories......................................................................74
Intensive Grazing Farms vs. Non-Grazing Farms .................................................................................................76
Comparison of Farms by Milking Frequency ........................................................................................................77
Comparison of Dairy Farm Business Data by Region ...........................................................................................78
Milk Production & Average Cost of Producing Milk by Region ..........................................................................79
Other Comparisons ................................................................................................................................................80
APPENDIX: PRICES, COSTS AND TRENDS IN THE NEW YORK DAIRY INDUSTRY..........................................83
GLOSSARY & LOCATION OF COMMON TERMS .......................................................................................................86
iii
LIST OF TABLES
Table Number
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Page
Comparison of Farm Business Summary Data, New York Dairy Farms, 1956-2006 ...................................4
Comparison of Farm Business Summary Data, Same 140 New York Dairy Farms, 2003-2006 ..................5
Business Characteristics & Resources Used, 240 New York Dairy Farms, 2006 .........................................8
Cash & Accrual Farm Expenses, 240 New York Dairy Farms, 2006 .........................................................10
Cash & Accrual Farm Receipts, 240 New York Dairy Farms, 2006...........................................................11
Net Farm Income, 240 New York Dairy Farms, 2006.................................................................................12
Labor & Management Income, 240 New York Dairy Farms, 2006 ............................................................13
Return to Capital, 240 New York Dairy Farms, 2006 .................................................................................14
Returns to All Labor & Management by Return to All
Capital With Appreciation, 240 New York Dairy Farms, 2006 ..............................................................14
2006 Farm Business & Nonfarm Balance Sheet,
240 New York Dairy Farms, 2006 ..........................................................................................................15
Farm Balance Sheet Analysis, 240 New York Dairy Farms, 2006..............................................................16
Farm Inventory Balance, 240 New York Dairy Farms, 2006......................................................................16
Statement of Owner Equity (Reconciliation), 240 New York Dairy Farms, 2006 ......................................17
Annual Cash Flow Statement, 240 New York Dairy Farms, 2006..............................................................18
Annual Cash Flow Data, 240 New York Dairy Farms, 2006 ......................................................................19
Farm Debt Payments Planned, Same 191 New York Dairy Farms, 2005 & 2006 ......................................20
Coverage Ratios, Same 191 New York Dairy Farms, 2005 & 2006 ...........................................................20
Debt to Asset Ratio vs. Cash Flow Coverage,
191 New York Dairy Farms, 2006 ..........................................................................................................20
Land Resources & Crop Production,
240 New York Dairy Farms, 2006 ..........................................................................................................21
Crop Management Factors, 240 New York Dairy Farms, 2006 ..................................................................21
Crop Related Accrual Expenses, New York Dairy Farms, 2006.................................................................22
Accrual Machinery Expenses, 233 New York Dairy Farms That Grow Forages, 2006..............................22
Crop Related Accrual Expenses by Hay Crop Production Per Acre,
29 New York Dairy Farms, 2006 ............................................................................................................23
Crop Related Accrual Expense by Corn Production Per Acre,
29 New York Dairy Farms, 2006 ............................................................................................................23
Dairy Herd Inventory, 240 New York Dairy Farms, 2006 ..........................................................................24
Milk Production, 240 New York Dairy Farms, 2006 ..................................................................................25
Milk Sold Per Cow & Farm Income Measures, 240 New York Dairy Farms, 2006 ...................................25
Culling Rate and Dairy Replacement Information, New York Dairy Farms, 2006 ....................................27
Cost of Producing Milk, Whole Farm Method, 240 New York Dairy Farms, 2006 ...................................28
Itemized Costs of Producing Milk Per Hundredweight Based on
Whole Farm Data, 240 New York Dairy Farms, 2006............................................................................29
Itemized Costs of Producing Milk per Hundredweight Based on Whole Farm Data,
Same 191 New York Dairy Farms, 2005-2006 .......................................................................................30
Cost of Producing Milk, Accrual Receipts from Dairy, and
Profitability, 240 New York Dairy Farms, 2006 .....................................................................................31
Farm Cost of Producing Milk by Milk Sold Per Cow, 240 New York Dairy Farms, 2006.........................31
Farm Cost of Producing Milk by Herd Size, 240 New York Dairy Farms, 2006........................................33
Ten Year Comparison: Average Cost of Producing Milk Per
Hundredweight, New York Dairy Farms, 1997 to 2006 .........................................................................36
Ten Year Comparison: Selected Business Factors, New York Dairy Farms, 1997 to 2006........................37
Dairy Related Accrual Expenses, 240 New York Dairy Farms, 2006.........................................................38
Purchased Feed & Crop Expenses Per Hundredweight of Milk and
Farm Income Measures, 240 New York Dairy Farms, 2006...................................................................39
Average Milk Income and Marketing Report, 170 New York Dairy Farms, 2006 .....................................40
Milk Price Information by Quintile, 170 New York Dairy Farms, 2006.....................................................41
Capital Efficiency, 240 New York Dairy Farms, 2006................................................................................42
Asset Turnover & Profitability, 240 New York Dairy Farms, 2006............................................................42
Labor Efficiency, 240 New York Dairy Farms, 2006 .................................................................................42
Labor Force Inventory & Cost Analysis, 240 New York Dairy Farms, 2006 .............................................43
Milk Sold Per Worker & Net Farm Income, 240 New York Dairy Farms, 2006........................................43
Farm Business Chart for Farm Management Cooperators, 240 New York Dairy Farms, 2006 ..................44
iv
Table Number
Page
47
A Farm Finance Checklist, 240 New York Dairy Farms, 2006...................................................................46
48
Financial Analysis Chart, 240 New York Dairy Farms, 2006 .....................................................................47
49
Cows Per Farm and Farm Family Income Measures, 240 New York Dairy Farms, 2006 ..........................48
50
Cows Per Farm and Related Farm Factors, 240 New York Dairy Farms, 2006..........................................49
51
Progress of Farm Businesses with Less Than 100 Cows, Same 38 New York Dairy Farms, 2002-2006 ...50
52
Progress of Farm Businesses with 100-499 Cows, Same 55 New York Dairy Farms, 2002-2006 .............51
53
Progress of Farm Businesses with More Than 500 Cows, Same 40 New York Dairy Farms, 2002-2006..52
54
Farm Business Summary by Herd Size, 240 New York Dairy Farms, 2006...............................................53
55
Farm Family Financial Situation by Herd Size, 240 New York Dairy Farms, 2006 ...................................55
56
Selected Business Factors by Herd Size, 240 New York Dairy Farms, 2006 .............................................59
57
Income and Expense Comparison for Farms Buying Majority of Forages Versus Similar
Size Farms Growing Forages, 2006 ........................................................................................................63
58
Selected Business Factors for Farms Buying Majority of Forages Versus Similar Size
Farms Growing Forages, 2006 ................................................................................................................64
59
Selected Business Factors by Type of Barn & Herd Size, 226 New York Dairy Farms, 2006 ...................65
60
Farm Business Chart for Small Conventional Stall Dairy Farms,
33 Conventional Stall Dairy Farms with 60 or Less Cows, New York, 2006.........................................66
61
Farm Business Chart for Large Conventional Stall Dairy Farms,
31 Conventional Stall Dairy Farms with More Than 60 Cows, New York, 2006...................................67
62
Farm Business Chart for Small Freestall Dairy Farms,
40 Freestall Barn Dairy Farms with 150 or less Cows, New York, 2006 ...............................................68
63
Farm Business Chart for Medium Freestall Dairy Farms, 32 Freestall
Barn Dairy Farms with 151-300 Cows, New York, 2006 .......................................................................69
64
Farm Business Chart for Large Freestall Dairy Farms, 90 Freestall Barn Dairy Farms with
300 or More Cows, New York, 2006 ......................................................................................................70
65
bST Non-users vs. Users, Same 57 Farms, 2002-2006................................................................................71
66
Comparison of Farm Business Data, Same 53 New York Dairy Farms, 1997-2006...................................72
67
Farm Receipts & Expenses Per Cow & Per Hundredweight for Three
Levels of Milk Production, 240 New York Dairy Farms, 2006 ..............................................................74
68
Farm Receipts & Expenses Per Cow & Per Hundredweight for Three
Herd Size Categories, 240 New York Dairy Farms, 2006 ......................................................................75
69
Intensive Grazing Farms vs. Non-Grazing Farms, New York State Dairy Farms, 2006.............................76
70
Selected Business Factors by Milking Frequency, New York Dairy Farms, 2005 & 2006.........................77
71
Comparison of Dairy Farm Business Data by Region, 240 New York Dairy Farms, 2006 ........................78
72
Milk Production & Average Cost of Producing Milk, Five Regions of New York ....................................79
73
Farm Business Summary & Farm Family Financial Situation,
22 New York Dairy-Renter Farms, 2006 ................................................................................................80
74
Farm Business Summary & Farm Family Financial Situation, Average of 24 Top 10 Percent Farms
by Rate of Return on All Capital (without appreciation), 2006..................................................................81
75
Farm Business Summary & Farm Family Financial Situation,
Average of 240 New York Dairy Farms, 2006 .......................................................................................82
A1
A2
A3
Prices Paid by New York Farmers for Selected Items, 1993-2006 .............................................................84
Values of New York Dairy Farm Inventory Items, 1990-2006 ...................................................................84
Number of Dairy Farms and Milk Cows by Size of Herd, New York State, 2005......................................85
v
LIST OF FIGURES & CHARTS
Figure 1.
Page
Location of the 240 New York Dairy Farms in the 2006
Dairy Farm Business Summary .................................................................................................................2
Figure 2.
Percent Change in Milk Production, Five Regions in New York,
1996-2006................................................................................................................................................79
Chart 1.
Operating Cost of Producing Milk and Price Received for Milk ..................................................................3
Chart 2.
Labor and Management Income Per Operator...............................................................................................6
Chart 3.
Operating Cost of Producing Milk and Milk Price ........................................................................................7
Chart 4.
Distribution of Labor & Management Incomes Per Operator .....................................................................13
Chart 5.
Net Farm Income (without appreciation) by Herd Size ...............................................................................24
Chart 6.
Net Farm Income & Milk Per Cow..............................................................................................................26
Chart 7.
Net Farm Income Per Cow & Milk Per Cow...............................................................................................26
Chart 8.
Milk Sold Per Cow and Cull Rate................................................................................................................27
Chart 9.
Net Farm Income Per Cow Without Appreciation and Cull Rate................................................................27
Chart 10.
Production Cost by Milk Per Cow ...............................................................................................................32
Chart 11.
Total Cost of Producing Milk/Cwt. & Milk Per Cow..................................................................................32
Chart 12.
Production Cost by Herd Size......................................................................................................................33
Chart 13.
Net Farm Income Per Cow & Total Cost of Producing Milk Per Hundredweight. .....................................34
Chart 14.
Variation in Average Milk Price..................................................................................................................38
Chart 15.
Net Milk Income Over Purchased Concentrate Per Cow Versus Return on Assets ....................................39
vi
INTRODUCTION
1
Dairy farm business summary (DFBS) projects are an integral part of Cornell Cooperative Extension's agricultural
educational program in New York State. The Department of Applied Economics and Management of the College of
Agriculture and Life Sciences at Cornell University, and County and Regional Extension staff, cooperate in sponsoring
DFBS projects. In 2006, over 300 dairy farms participated, including dairy owners, renters, full-time, part-time, and out-ofstate farms. Business records submitted by dairy farmers from 45 New York counties provide the basis for continuing
Extension programs, data for applied studies, and for use in the classroom. Regardless of the use of the data, confidentiality
of individual farm data is maintained.
Cornell Cooperative Extension educators enroll the cooperators and collect the records. In addition, assistance is
provided by individual consultants Bruce Dehm and Charles Radick, and by consultants from Farm Credit of Western New
York and First Pioneer Farm Credit. Each cooperator receives a detailed summary and analysis of his or her business. All
educators are using a computer in their offices or on the farm to process and return the individual farm business reports for
immediate use. The program used to generate the farm business reports can be found at the website http://dfbs.cornell.edu.
Regional reports are prepared by Cornell faculty and used by DFBS cooperators and other farmers to compare their farm
performance with regional averages. The DFBS program helps farmers improve accounting and financial analysis
techniques, develop managerial skills, solve business and financial management problems and plan the future of their
business. For more information, please visit http://dfbs.aem.cornell.edu
Individual farm records from the 6 regions and 45 counties of the State (Figure 1, page 2) have been combined and
the total data set analyzed to determine the effects of different levels of price, technology, and management on dairy farm
incomes. This study provides current dairy farm business information for use by farmers, Cooperative Extension staff,
teachers, and others concerned with the New York dairy industry.
Farms Included
Data from 240 specialized dairy farms are included in the main body of this report. These farms do NOT represent
the "average" for all dairy farms in the State. Participation was on a voluntary basis, therefore, not all areas or types of
operations were proportionately represented (Figure 1, page 2). Participants represent more than 3 percent of the milk cow
operations in New York (see Appendix Table A3). The 240 specialized dairy farms represent a cross section of better than
average commercial dairy farm owner/operators in the State. Dairy farm renters, dairy-cash crop farmers with crop sales
exceeding 10 percent of milk sales, part-time dairy operators, and organic farms are not included in the main body of this
report. Data on dairy farm renters are summarized separately in the supplemental information section of the publication.
Features
Accrual adjustment procedures have been used to provide the most accurate accounting of farm receipts and farm
expenses for measuring farm profits. An explanation of these procedures is found on page 9. Five measures of farm
profitability; net farm income, labor and management income, return on equity, return on all capital, and return to all labor
and management are calculated on pages 11 through 14. The balance sheet is presented with the current portion of
intermediate and long-term debt identified as a current liability, on pages 14 and 15. The statement of owner equity, which
shows the interrelationship between farm profitability, non-farm cash flows and net worth is presented on page 17. A
detailed cash flow statement, as well as budgeting data and debt repayment analysis are presented on pages 18 through 20.
The whole farm method of calculating the cost of producing milk is detailed on pages 28 through 33. The operating
cost, purchased inputs cost and total cost of producing 100 pounds of milk are developed and analyzed. Farm business
charts for farms with conventional and freestall housing are presented on pages 63 through 67. Specific studies of the
performance of dairy farms using bST, rotational grazing and three times (3X) a day milking are presented on pages 71, 76
and 77.
Acknowledgements
The authors wish to acknowledge extension field staff and cooperating farmers for their invaluable contributions to
this project. In addition, the authors appreciate the comments provided by Loren Tauer and George Conneman. Loree
McOwen’s assistance with preparing the publication is appreciated.
1
This report was written by Wayne A. Knoblauch, Professor; Linda D. Putnam, Extension Support Specialist, in the Dept. of
Applied Economics and Management at Cornell University, and Jason Karszes, Senior Extension Associate, Pro-Dairy.
2
Figure 1.
LOCATION OF THE 240 NEW YORK DAIRY FARMS
IN THE 2006 DAIRY FARM BUSINESS SUMMARY
2006 Regional Summary Publications
Region
Western and Central Plain
Publications
E.B. 2007-06
Author(s)
Wayne A. Knoblauch, Linda D. Putnam, Jason Karszes, John Hanchar,
Griffin Moag, Kyle Getty, and Zachary Waite
Northern Hudson
E.B. 2007-07
George J. Conneman, Linda D. Putnam, Cathy S. Wickswat, Sandra
Buxton, Richard C. Smith & Jason Karszes
Western and Central Plateau
E.B. 2007-10
Wayne A. Knoblauch, Linda D. Putnam, Jason Karszes, James W. Grace,
David L. Munsee & Joan S. Petzen
Northern New York
E.B. 2007-11
Wayne A. Knoblauch, Linda D. Putnam, Jason Karszes, Peggy Murray,
Frans Vokey, Molly Ames, William Van Loo, Anita Deming, and
Jessica Prosper
Central Valleys
E.B. 2007-14
Wayne A. Knoblauch, Jason Karszes , Charles Z. Radick, Cathy S
Wichswat, James P Manning, David Balbian, George Allhusen,
Sandra Buxton & Linda D. Putnam
Southeastern New York
E.B. 2007-18
Wayne A. Knoblauch, Linda D. Putnam, Mariane Kiraly, Joseph J. Walsh,
Stephen E. Hadcock & Larry R. Hulle
3
FIFTY YEARS OF NEW YORK STATE DAIRY FARM BUSINESS DATA
New York dairy farming has changed dramatically over the past 50 years (Table 1, page 4). Dairy cows per farm on
cooperating farms increased 10 fold between 1956 and 2006 with more than a doubling in herd size over the last 10 years.
The DFBS sample is not representative of all farms in New York State. New York Agricultural Statistics Service data
indicate the average herd in the state increased in size about two and a half times over the same 50-year period. Milk output
per cow increased more than 159 percent with the largest increase occurring between 1986 and 1996. Labor efficiency,
measured by pounds of milk sold per worker, was up 487 percent on DFBS farms, and the operating cost of producing milk
increased more than 655 percent with the largest jump occurring between 1966 and 1976.
There is a large increase in farm capital invested per farm, up 660 percent since 1956. Net farm income per farm
increased 104 percent (adjusted for 2006 dollars). Labor and management income per operator is down 176 percent from 50
years ago (adjusted for 2006 dollars) as 2006 was a very low income year. This is a reflection of the increased variability
over the last 10 years. Some factors could not be calculated with 1956 and 1966 data because liabilities, interest paid, and
appreciation were not available in those years. Farm net worth excluding deferred taxes has increased 874 percent over the
last 30 years and return on equity capital decreased 67 percent since 1976.
FOUR YEARS OF VARIABILITY
Recognition and evaluation of the progress that has occurred on farms can best be achieved by studying the same
farms over a period of time. Table 2, page 5, presents average data from 140 farms that have been DFBS cooperators each
year since 2003. Chart 1 shows the price received for milk in comparison to the operating cost of producing a
hundredweight of milk for these farms. The low milk price and higher costs in 2006 provided dairy farmers with a
challenge. The highest operating margin per hundredweight was $4.11 in 2004.
Average net farm income without appreciation in 2006 was 13 percent below the 2003 average, and 84 percent
below the 2004 average. Net worth increased 3 percent in 2003, increased 18 percent in 2004, increased 16 percent in 2005,
and increased 2 percent in 2006.
The last four years have been a period requiring skillful decision making and improved management skills on the
part of New York dairy farm operators. Risk management skills, including output price management, are becoming more
important to farm business success.
Chart 1.
17
OPERATING COST OF PRODUCING MILK AND PRICE RECEIVED FOR MILK
Same 140 New York Dairy Farms, 2003-2006
16
$/cwt.
15
$4.11
Operating Margin
$3.74
14
$1.66
13
$1.77
12
Milk Price
11
10
2003
Operating Cost of Producing Milk
2004
2005
Year
2006
4
Table 1.
COMPARISON OF FARM BUSINESS SUMMARY DATA
New York Dairy Farms, 1956 - 2006
Selected Factors
Number of farms
1956
1966
1976
342
731
615
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
34
20
3,025
1.80
982
47
30
5,610
1.80
1382
71
52
9,506
2.50
2652
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
8,897
2.1
10.0
11,900
2.5
14.0
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
19
168,100
26
311,700
Cost Control
Grain & conc. as % of milk sales
Dairy feed & crop expense/cwt.
Operating cost of prod. cwt. milk
Total cost of producing cwt. milk
Milk receipts per cwt. milk
Capital Efficiency
Total farm capital
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
Profitability
Net farm income without apprec.5
Net farm income with apprec.5
Labor & management income per
operator/manager5
Rate of return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
26%
$1.38
$1.60
$2.04
$4.18
27%
$1.68
$2.81
$4.54
$4.91
1986
1996
2006
414
300
240
95
77
15,374
3.09
288
167
124
33,504
4.48
415
350
283
80,862
8.194
730
13,400
2.8
13.1
16,237
2.7
14.3
20,113
2.8
16
23,083
3.2
18
28
380,200
31
497,555
37
747,861
434
987,5304
27%
$3.47
$6.85
$10.42
$9.90
24%
$4.00
$9.48
$13.90
$12.65
30%
$5.46
$12.00
$15.23
$14.98
29%
$5.02
$12.08
$15.30
$13.85
$40,598
$1,194
$248
$556
$285
0.43
$80,567
$1,710
$375
$796
$415
0.48
$275,297
$3,877
$691
$1,959
$756
0.40
$550,240
$5,792
$1,062
$2,758
$1,176
0.43
$1,038,406
$6,218
$1,107
$2,701
$1,469
0.55
$2,719,207
$7,762
$1,384
$3,030
$2,130
0.52
NA
$57,583
NA
$117,919
NA
$82,808
$43,890
$74,991
$82,988
$97,709
$41,144
$117,452
$41,007
$91,534
$28,178
$7,060
$23,873
$-31,269
NA
NA
NA
NA
NA
NA
7.9%
7.5%
5.6%
4.3%
6.0%
-2.9%
5.5%
6.3%
5.2%
2.6%
4.0%
1.2%
Financial Summary, End Year
Farm net worth
NA
NA
$178,300
$348,909
$648,186
$1,736,505
Change in net worth with apprec.
NA
NA
NA
$20,275
$40,797
$27,158
0.38
0.39
0.38
Debt to asset ratio
NA
NA
0.353
$2,171
$2,451
$2,927
Farm debt per cow
NA
NA
$1,3663
2
Acres of cropland harvested.
3
Average of 608 dairy farm cooperators submitting financial information in 1976.
4
Based on hours actually worked by owner/operator instead of standard 12 months per full-time owner/operator.
5
Adjusted for inflation using Consumer Price Index – 2006 dollars. NA = not available.
5
Table 2.
COMPARISON OF FARM BUSINESS SUMMARY DATA
Same 140 New York Dairy Farms, 2003 - 2006
Selected Factors
2003
2004
2005
2006
Milk receipts per cwt. milk
$13.31
$16.64
$16.02
$13.87
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent6
Total tillable acres
380
292
86,840
8.98
766
400
308
90,409
9.45
803
415
329
96,955
9.68
828
435
350
101,634
9.95
853
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
22,849
3.3
17
22,599
3.6
18
23,349
3.5
19
23,359
3.3
19
Labor Efficiency
Cows per worker6
Milk sold per worker, lbs.6
42
967,033
42
956,712
43
1,001,602
44
1,021,450
Cost Control
Grain & concentrate purchased as % of milk sales
Dairy feed & crop expense per cwt. milk
Operating cost of producing cwt. milk
Total cost of producing cwt. milk
Hired labor cost per cwt.
Interest paid per cwt.
Labor & machinery costs per cow
30%
$5.00
$11.54
$14.39
$2.61
$0.52
$1,241
28%
$5.59
$12.53
$15.48
$2.74
$0.53
$1,316
26%
$5.13
$12.28
$15.34
$2.69
$0.63
$1,364
29%
$5.02
$12.21
$15.22
$2.65
$0.78
$1,355
Capital Efficiency, Average for Year
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
$6,605
$1,168
$2,610
$1,792
0.56
$6,822
$1,190
$2,652
$1,858
0.67
$7,289
$1,272
$2,769
$2,006
0.63
$7,530
$1,314
$2,885
$2,100
0.54
$47,708
$114,364
$255,067
$357,958
$232,451
$369,135
$41,457
$137,342
$-18,779
$109,591
$81,625
$-38,515
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per
operator/manager
Rate return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
3.1%
3.6%
1.0%
18.1%
12.3%
8.5%
15.9%
11.8%
7.3%
2.9%
4.2%
1.3%
Financial Summary, End Year
Farm net worth
$1,455,583
$1,715,703
$1,987,017
$2,027,368
Change in net worth with appreciation
$49,156
$265,512
$259,377
$22,777
Debt to asset ratio
0.44
0.40
0.37
0.40
Farm debt per cow
$2,960
$2,804
$2,801
$2,983
6
Based on hours actually worked by owner/operator instead of standard 12 months per full-time owner/operator.
6
ADJUSTING PROFIT, PRICE AND COSTS FOR INFLATION
Labor and management income per operator in 2006 was at an all-time low, when measured in nominal (actual)
value (Chart 2). Over the period 1993 to 2006, labor and management incomes per operator did not exceed $25,000 except
for $55,000 in 1998, nearly $43,000 in 1999, over $45,000 in 2001, over $78,000 in 2004, and nearly $65,000 in 2005. The
reader is reminded that the average herd size of DFBS participating farms steadily increased from 130 cows to 350 cows
over this period.
Chart 2.
LABOR AND MANAGEMENT INCOME PER OPERATOR
Dairy Farm Business Summary Farms, 1993-2006
100,000
$ Labor and Management
Income per Operator
80,000
60,000
40,000
20,000
0
-20,000
-40,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
7
Milk prices in 2006 averaged $13.85 per hundredweight in actual dollars (Chart 3). However, the 2006 milk price,
adjusted for inflation, in 1994 dollars, would have been about $10.18 per hundredweight.
Operating cost of producing milk (actual) had been very constant from 1993 through 1995 (Chart 3, page 7). Feed
costs were higher in 1996 and so were operating costs of producing milk. Operating costs were on a downward trend from
1996 through 2000. Operating costs then increased in 2001, fell in 2002, and increased in 2003 and 2004, but remained
higher than the early 1990’s. Operating costs decreased slightly in 2005 and 2006. Real costs of producing milk per
hundredweight have been on a downward trend over this 13-year period.
Chart 3.
OPERATING COST OF PRODUCING MILK AND MILK PRICE7
Dairy Farm Business Summary Farms, 1994-2006
17.00
16.00
Actual Milk Price
$/Hundredweight
15.00
14.00
13.00
12.00
Real Milk Price
11.00
Actual Operating COPM
10.00
Real Operating COPM
9.00
8.00
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Year
Operating COPM Real
7
Operating COPM Actual
Milk Price Real
Milk Price Actual
Actual operating cost of producing milk as well as milk price are adjusted for inflation, to obtain real values, using the
Consumer Price Index–1994 dollars.
8
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
Business Characteristics and Resources Used
Recognition of important business characteristics and identification of the farm resources used is necessary for
evaluating management performance. The combination of resources used and management practices employed is known as
farm organization. Important farm business characteristics and the number of farms reporting these characteristics for 2006
are presented in the following table.
Table 3.
BUSINESS CHARACTERISTICS AND RESOURCES USED
240 New York Dairy Farms, 2006
Dairy Livestock (number)
Beginning of Year
End of Year
Average for Year
Cows
337
357
350
Heifers
276
288
283
Type of Business
Sole Proprietorship
Partnership
Limited Liability Corp.
Subchapter S Corporation
Subchapter C Corporation
Number
116
56
51
16
1
Percent
48
23
21
7
1
Barn Type
Stanchion
Freestall
Combination
Number
64
162
14
Percent
27
67
6
Milking System
Bucket & Carry
Dumping Station
Pipeline
Herringbone Conventional
Herringbone Rapid Exit
Parallel
Parabone
Rotary
Other
Number
0
2
68
69
18
58
6
1
18
Percent
0
1
28
29
8
24
3
1
7
Milking Frequency
2 times per day
3 times per day
Other
Number
157
76
7
Percent
65
32
3
Business Records
Account Book
Accounting Service
On-Farm Computer
Other
Number
38
45
155
2
Percent
16
19
64
1
Dairy Records
Testing Service
On Farm System
Other
None
Number
178
31
2
28
Percent
74
13
1
12
bST Usage
Used consistently
Used inconsistently
Started using in 2006
Stopped using in 2006
Not used in 2006
Average % usage, if used
Number
93
13
1
8
126
42%
Percent
39
5
1
3
52
Labor Force
Operators
Family Paid
Family Unpaid
Hired
Total Months
Average
22.3
4.2
2.6
69.2
98.3
Percent
23
4
3
70
100
Operators (total = 391)
Age
Education
Estimated value of labor & management/farm
Land Used
Total acres:
Owned
Rented
Tillable acres:
Owned
Rented
Total
Breed of Herd
Holstein
Jersey
Other
Average
1.63
51
15 years
$66,503
Farms Reporting
Number
Average
240
219
551
412
240
216
240
370
400
730
91%
5%
4%
There were 391 full-time operator equivalents on the 240 dairy farms for an average of 1.63 operators per farm.
The operators averaged 51 years of age and 15 years of formal education. Additional data on the labor force is in Table 44.
All 240 farm businesses included in this dairy summary own farm real estate. Dairy farm renters are summarized
separately later in this publication. However, 216 of the dairy farm owners rented an average of 400 acres of tillable land in
2006. The 240 farms averaged 730 total tillable acres per farm of which 360 acres were rented. Tables 19 and 25 contain
additional information on land use and the dairy herd.
9
Accounting Procedures
Accrual accounting adjustments are made to cash receipts and expenses to accurately measure annual receipts,
expenses, and farm profitability. These procedures express the true value and cost of production for the year, regardless of
whether cash was received or expended in this year. Cash expenses and cash receipts are used when evaluating the cash flow
position of the business.
The accrual accounting adjustments consider changes in accounts payable and receivable, prepaid expenses, and
changes in inventory of not only such items as crops and livestock, but also the inventory of production items such as
fertilizer, seed and fuel. In this manner, the total cost of production and the total value of production are obtained to provide
an accurate representation of profitability in that year.
Accrual adjustments are complemented by accounting procedures used to separate changes in inventory of capital
assets into changes caused by price and those caused by quality or quantity changes. Separating price changes (appreciation)
from physical changes in the farm inventory are important in determining farm profitability. Appreciation of farm assets is
included in the return to farm capital, but excluded from the return to labor and management.
Income Statement - Expenses
The accrual income statement begins with an accounting of all farm business expenses. Farm business expenditures
are grouped into the following nine major categories:
1.
Hired labor includes gross wages plus the farm share of social security, workers' compensation insurance,
employee health insurance and other employee benefits paid by the farm employer.
2.
Feed expenses are divided into purchased dairy grain and concentrate, purchased dairy roughage and all
feed purchased for nondairy livestock to allow more thorough analysis of dairy herd feeding costs. The
costs of growing grain and roughage are not included in cash and accrual feed expenses.
3.
Machinery costs represent all the operating costs of using machinery on the farm. Ownership costs are
excluded here but are included in the analysis of machinery costs presented on page 22.
4.
Livestock expenses include the cost of supplies and services directly associated with the care and
maintenance of the dairy herd, such as breeding, veterinary, bedding, milking supplies and custom
boarding expenses plus milk marketing costs. The purchase of replacement cattle is considered a herd
maintenance expense while expansion livestock is not.
5.
Crop expenses include the costs of fertilizer, lime, seeds, spray and other crop supplies.
6.
Real estate expenses are the direct costs associated with owning and maintaining farm land and buildings.
7.
Other includes insurance, the farm share of utilities, interest paid on all farm indebtedness and
miscellaneous costs.
8.
Expansion livestock is purchased dairy cattle and other livestock that cause an increase in herd size from
the beginning to the end of the year. It is a nonoperating cost included in total expenses.
9.
Depreciation of machinery and buildings are nonoperating costs included in total expenses. Depreciation
charges are based on those reported for income tax purposes.
10
Cash and accrual farm expenses are summarized below. Total operating accrual expenses for the 240 farms
averaged $3,118 per day and 91 percent of total farm accrual expenses. Cash paid is the actual amount of money paid out
during the year and does not necessarily represent the cost of goods and services actually used.
Table 4.
CASH AND ACCRUAL FARM EXPENSES
240 New York Dairy Farms, 2006
Expense Item
Hired Labor
Feed
Dairy grain & concentrate
Dairy roughage
Nondairy livestock
Professional nutritional services
Machinery
Machinery hire, rent & lease
Machinery repairs &
farm vehicle expense
Fuel, oil & grease
Livestock
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking Supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Crops
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Real Estate
Land, building & fence repair
Taxes
Rent & lease
Other
Insurance
Utilities
Interest paid
Other professional fees
Miscellaneous
Total Operating
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
Cash
Paid
$207,625
-
Change in
Inventory
or Prepaid
Expense
$-311 <<
+
Change in
Accounts
Payable
$349
=
Accrual
Expenses
$208,284
Percent
18
295,897
21,596
113
298
-19,333
227
1
-231 <<
9,609
735
0
1
324,840
22,105
113
531
28
2
<1
<1
22,968
58,778
-40 <<
-770
766
1,345
23,774
60,893
2
5
46,130
-137
464
46,731
4
5,462
18,273
51,187
64,486
24,104
27,758
1,252
23,017
16,655
3,897
6,284
0
-11
-842
0
171
-429
0
-84
83
-136
-34
-4
108
669
47
220
423
1
417
-81
23
-22
5,458
18,392
52,698
64,533
24,154
28,610
1,253
23,518
16,491
4,055
6,295
1
2
4
6
2
2
<1
2
1
<1
1
<<
<<
<<
<<
<<
<<
21,092
16,524
12,318
1,443
-2,657
-2,265
-827
-140 <<
951
29
338
88
24,699
18,817
13,482
1,671
2
2
1
<1
18,042
17,226
20,875
42
78 <<
-239 <<
140
-116
206
18,140
17,033
21,321
2
1
2
13,788
32,669
62,543
6,633
8,371
$1,127,305
$15,979
681
-159 <<
-6 <<
-82<<
-22 <<
-84
$-28,236
$0 <<
74
246
154
83
153
$17,415
-25
0
14,020
32,920
62,779
6,738
8,608
$1,172,956
$15,954
$681
$60,817
$40,989
1
3
5
1
1
100
$1,291,397
11
Change in inventory represents feeds and supplies purchased this year but not used (positive change), and similar
items purchased in a prior year and used this year (negative change). For example, purchased dairy grain and concentrate
inventory decreased $19,333.
Prepaid expenses (noted by « in Table 4) are advance payments made for services and noninventory items to be
used in future years. For example, advance payments for rent decreased an average of $239 per farm in 2006, and that
decrease is subtracted from cash rent to determine the correct 2006 accrual rental expense.
Changes in accounts payable reflect supplies/services used in this year's production but not paid for (positive
change), and payments for production inputs used in a prior year (negative change).
Accrual expenses are cash expenses adjusted for changes in inventory, prepaid expenses and accounts payable.
They are the total costs of inputs actually used in this year's business. Total change in inventory and prepaid expenses equals
$-28,236 and total change in accounts payable equals $17,415.
Income Statement - Receipts
Cash and accrual farm receipts are presented in the following table. Total cash receipts averaged $1,281,116 per
farm. Total accrual receipts averaged $1,332,542 per farm. Accrual receipts were greater than cash receipts due primarily to
dairy herd growth and increases in crop inventory. Cow numbers increased an average of 20 head per farm and the
homegrown feed inventory per farm increased $17,652. Homegrown feed inventory per cow increased $19 from beginning
to end of year.
Table 5.
CASH AND ACCRUAL FARM RECEIPTS
240 New York Dairy Farms, 2006
Cash
Receipts
$1,123,652
57,619
19,846
2,389
11,212
42,616
3,470
207
20,106
+
Change in
Inventory
Receipt Item
Milk sales
Dairy cattle
$34,385
Dairy calves
3,617
Other livestock
592
Crops
17,652
Government receipts
08
Custom machine work
Gas tax refund
Other
- Nonfarm noncash
(-) 433
Capital9
Total
$1,281,116
$55,813
8
Change in advanced government receipts.
9
Gifts or inheritances of cattle or crops included in inventory.
+
Change in
Accounts
Receivable
$-3,531
-496
-25
-17
-604
-288
20
0
554
$-4387
=
Accrual
Receipts
$1,120,121
91,507
23,438
2,964
28,259
42,327
3,490
207
20,661
Percent
87
6
2
<1
2
3
<1
<1
1
(-)
433
$1,332,542
100
Cash receipts include the gross value of milk checks received during the year plus all other payments received for
the sale of farm products, services and government programs.
Accrual receipts represent the value of all farm commodities produced and services actually provided by the farmer
during the year. Increases in livestock inventory caused by herd growth and/or quality, are included. Decreases in inventory
caused by herd reduction are deducted. Changes in inventories of crops grown are included. Changes in advanced
government receipts are the amount by which government payments received for participating in a future year's program
have changed from 2005 to 2006. An increase requires a negative adjustment to cash receipts while a decrease is a positive
adjustment. Changes in accounts receivable include the difference between the January milk check for December 2006
marketings and the previous January's check, and other delayed payments.
Nonfarm noncash capital are gifts and inheritances of cattle and crops received by the farm owner/operator, and
included in inventory or used in the business during the year. They are deducted from growth in inventory and reduce
accrual receipts because they came from outside the farm business. Gifts and inheritances of machinery and real estate are
accounted for in Table 12.
12
Profitability Analysis
Farm owners/operators contribute labor, management, and capital to their businesses. The best combination of
these resources produces optimum profits. Farm profits can be measured as the return to all family resources or as the return
to one or more individual resources such as labor and management.
Net farm income is the total combined return to the farm operator(s) and other unpaid family members for their
labor, management and equity capital. It is the farm family's net annual return from working, managing, financing and
owning the farm business. This is not a measure of cash available from the year's business operation. Cash flow is evaluated
later in this report.
Net farm income is computed with and without appreciation. Appreciation represents the change in farm inventory
values caused by changes in prices during the year. Appreciation is a major factor contributing to changes in farm net worth
and must be included in the profitability analysis. Net appreciation totaled $76,308 per farm in 2005. On the average, farm
real estate appreciated $48,913 or 5 percent of beginning fair market value. Machinery appreciated 3.4 percent while dairy
cattle prices appreciated 1.5 percent in 2006.
Average data from 24 farms with the highest rates of return to all capital (without appreciation) are compared with
the 240 farm average in Table 8 and in many of the following tables. Net farm income without appreciation averaged
$259,888 per farm on the top 10 percent farms, 532 percent greater than the 240-farm average.
Table 6.
NET FARM INCOME
240 New York Dairy Farms, 2006
Average 240 Farms
Per Farm
Per Cow
Item
Total accrual receipts
Average Top 10% Farms10
Per Farm
Per Cow
$1,332,542
$1,904,931
10,883
-7,232
Machinery
15,862
25,544
Real Estate
48,913
45,682
650
2,677
$1,408,850
$ 1,971,602
- Total accrual expenses
1,291,397
1,645,043
= Net Farm Income (with appreciation)
$117,452
$335
$326,558
$676
$41,144
$117
$259,888
$538
+ Appreciation: Livestock
Other Stock & Certificates
= Total including appreciation
Net Farm Income (without appreciation)
10
Average of 24 farms with highest rates of return to all capital (without appreciation).
Labor and management income is the part of net farm income without appreciation returned to the operator(s') labor
and management. Appreciation is not included as part of the return to labor and management. Labor and management
income is determined by deducting the charge for unpaid family labor and the cost of using equity capital at a real interest
rate of 5 percent, from net farm income excluding appreciation. The interest charge reflects the long-term average rate of
return above inflation that a farmer might expect to earn in comparable risk investments. Operator(s’) labor is not included
in unpaid family labor.
13
Labor and management income per operator measures the return to one full-time operator's labor and management.
A full-time operator provides 12 months of labor and management.
Table 7.
LABOR AND MANAGEMENT INCOME
240 New York Dairy Farms, 2006
Item
Net farm income without appreciation
- Family labor unpaid @ $2,300 per month
- Real interest @ 5% on $1,722,926 equity capital
for average & $2,215,330 for the top 10% farms
= Labor & Management Income (1.63 operators)
Average
240 Farms
Average Top
10% Farms11
$ 41,144
$259,888
6,057
5,165
86,056
110,767
$-50,968
Labor & Management Income per Operator
(1.43 operators)
$-31,269
$143,956
$100,668
11
Average of 24 farms with highest rates of return to all capital (without appreciation).
Labor and management income per operator averaged $-31,269 on these 240 dairy farms in 2006. The range in
labor and management income per operator was from less than $-510,000 to more than $250,000. Returns to labor and
management were negative on 69 percent of the farms. Labor and management incomes per operator were between $0 and
$50,000 on 22 percent of the farms while 9 percent showed labor and management incomes of $50,000 or more per operator.
Chart 4.
DISTRIBUTION OF LABOR & MANAGEMENT INCOMES PER OPERATOR
240 New York Dairy Farms, 2006
40%
35%
35%
Percent of Farms
30%
25%
22%
20%
20%
15%
14%
10%
6%
3%
5%
0%
< -100
-100 to -50
-50 to 0
0 to 50
50 to 100
Labor & Management Incomes Per Operator (thousand dollars)
> 100
14
Return to equity capital measures the net return remaining for the farmer's equity or owned capital after a charge has been
made for the owner/operator's labor and management and unpaid family labor. The earnings or amount of net farm income
allocated to labor and management is the opportunity cost or value of operator(s') labor and management estimated by the
cooperators. Return on equity capital is calculated with and without appreciation. The rate of return on equity capital is
determined by dividing the amount returned by the year's average farm net worth or equity capital. Return to all capital is
calculated by adding interest paid to the return on equity capital and then dividing by average farm assets to calculate the rate
of return on average total capital. Net farm income from operations ratio is net farm income (without appreciation) divided
by total accrual receipts.
Table 8.
RETURN TO CAPITAL
240 New York Dairy Farms, 2006
Item
Average
240 Farms
Average Top
10% Farms12
$117,452
6,057
66,503
$44,893
62,779
$107,672
$326,558
5.165
68,831
$252,562
86,352
$338,914
$-31,415
$31,364
$185,892
$272,244
Net farm income with appreciation
- Family labor unpaid at $2,300 per month
- Value of operators' labor & management
= Return to equity capital with appreciation
+ Interest paid
= Return to all capital with appreciation
Return to equity capital without appreciation
Return to all capital without appreciation
Rate of return on average equity capital:
with appreciation
without appreciation
Rate of return on all capital:
with appreciation
without appreciation
Net farm income from operations ratio
2.6%
-1.8%
11.4%
8.4%
4.0%
1.2%
0.03
9.3%
7.5%
0.14
12
Average of 24 farms with highest rates of return to all capital (without appreciation).
Return to all labor and management is another measure of profitability of a business that can be calculated. It is
calculated by adding the charge for unpaid family labor and the hired labor expense to labor and management income. Table
9 shows that farms with higher return to all capital with appreciation also had significantly higher return per hour to all labor
and management.
Table 9.
RETURN TO ALL LABOR AND MANAGEMENT BY RETURN
TO ALL CAPITAL WITH APPRECIATION
240 New York Dairy Farms, 2006
Item
Return to all capital with appreciation
Rate of return on all capital with appreciation
Total returns to all labor & management
Worker equivalent
Return per worker equivalent
Returns/hour (2,760 hours/worker/year)
Quartile by Return to All Capital With Appreciation
Lowest
3rd
2nd
Top
25%
25%
25%
25%
$-56,515
-4.3%
$16,859
4.51
$3,742
$1.36
$7,892
0.7%
$31,791
3.37
$9,443
$3.42
$86,452
3.4%
$152,858
7.71
$19,834
$7.19
$392,857
6.7%
$524,387
17.18
$30,526
$11.06
15
Farm and Family Financial Status
Evaluating the financial status of the farm business and the farm family is an important part of business analysis.
The first step is to inventory all the assets, determine all liabilities and fill out the balance sheet. The second step is to
analyze the complete balance sheet by evaluating the relationships between assets and liabilities and changes made during
the year.
Table 10.
2006 FARM BUSINESS AND NONFARM BALANCE SHEET
240 New York Dairy Farms, 2006
Farm Assets
Current
Farm cash, checking
& savings
Accounts receivable
Prepaid expenses
Feed & supplies
Total Current
Jan. 1
Dec. 31
$20,172
86,396
3,413
261,087
$371,068
$19,298
82,009
2,041
251,874
$355,222
Intermediate
Dairy Cows:
owned
leased
Heifers
Bulls & other livestock
Mach. & equip. owned
Mach. & equip. leased
Farm Credit stock
Other stock & certificates
Total Intermediate
Long Term
Land & buildings:
owned
leased
Total Long Term
$452,243
892
264,922
2,796
467,738
2,777
6,329
56,722
$1,254,418
$486,712
696
279,314
3,412
496,217
3,148
3,670
61,571
$1,334,740
$1,015,416
4,364
$1,019,780
$1,098,879
4,304
$1,103,184
Total Farm Assets
$2,645,267
$2,793,146
Farm Liabilities
& Net Worth
Current
Accounts payable
Operating debt
Short term
Advanced gov’t. receipt
Current portion:
Intermediate
Long term
Total Current
Intermediate
Structured debt
1-10 years
Financial lease
(cattle & machinery)
Farm Credit stock
Total Intermediate
Long Term
Structured debt
> 10 years
Financial lease
(structures)
Total Long Term
Total Farm Liabilities
FARM NET WORTH
Nonfarm Liabilities13
& Net Worth
Nonfarm Liabilities
NONFARM NET WORTH
Nonfarm Assets13
Jan.1
Dec. 31
Personal cash, checking
& savings
$8,790
$8,798
Cash value life insurance
21,184
23,243
Nonfarm real estate
92,559
97,766 FARM & NONFARM14
Auto (personal share)
14,644
14,036 Total Assets
Stocks & bonds
47,648
56,546 Total Liabilities
Household furnishings
7,860
7,936
All other
32,941
48,837 TOTAL FARM & NONTotal Nonfarm
$225,626
$257,163 FARM NET WORTH
13
Average of 117 farms completing the nonfarm balance sheet.
14
Sum of average farm values for 240 farms and nonfarm values for 117 farms.
Jan. 1
Dec. 31
$33,561
50,484
1,980
0
$50,951
62,706
5,078
0
68,714
19,659
$174,398
77,923
22,383
$219,041
$396,476
$436,158
3,669
6,329
$406,474
3,844
3,670
$443,672
$350,685
$389,624
4,364
$355,049
4,304
$393,928
$935,921
$1,056,641
$1,709,346
$1,736,505
Jan. 1
$2,152
$223,474
Dec. 31
$2,511
$254,652
Jan. 1
$2,870,893
938,073
Dec. 31
$3,050,309
1,059,152
$1,932,820
$1,991,157
Financial lease obligations are included in the balance sheet. The present values of all future payments are listed as
liabilities since the farmer (lessee) is committed to making the payments. The present values are also listed as assets,
representing the future value the item has to the business.
16
The farm balance sheet analysis includes financial and debt ratios and factors measuring levels of debt. Percent
equity is calculated by dividing farm net worth by farm assets. Equity increases as the value of assets increase more than
liabilities. The debt to asset ratios reflect strength in solvency and the potential capacity to borrow. The debt analysis ratios
show how well the debt is structured and managed. Debt levels per unit of productive capacity include some old standards
that are still useful if used with measures of cash flow and repayment ability.
Table 11.
FARM BALANCE SHEET ANALYSIS
240 New York Dairy Farms, 2006
Average
240 Farms
Item
Farm Financial Ratios:
Percent equity
Debt/asset ratio: total
long term
intermediate & current
Leverage Ratio:
Current Ratio:
Working Capital: $135,654 Dollars as % of Total Expenses:
Farm Debt Analysis:
Accounts payable as % of total debt
Long term liabilities as % of total debt
Current & intermediate liabilities as % of total debt
Cost of term debt (weighted average)
Average Top
10% Farms15
62%
0.38
0.36
0.39
0.61
1.62
11%
$242,378
5%
37%
63%
6.3%
Per Tillable
Per Cow
Acre Owned
Farm Debt Levels:
Total farm debt
$2,927
$2,854
Long term debt
1,089
1,062
Intermediate & long term
2,319
2,261
Intermediate & current debt
1,838
1,792
15
Average of 24 farms with highest rates of return to all capital (without appreciation).
61%
0.39
0.42
0.38
0.65
1.85
15%
4%
42%
58%
6.5%
Per Cow
$2,984
1,268
2,417
1,716
Per Tillable
Acre Owned
$3,009
1,279
2,437
1,731
The farm inventory balance accounts for the changes in the values of major farm assets from the beginning to the
end of the year.
Table 12.
FARM INVENTORY BALANCE
240 New York Dairy Farms, 2006
Item
Value beginning of year
Purchases
+ nonfarm noncash transfer17
- Lost capital
- Net sales
- Depreciation
= Net Investment
+ Appreciation
Value end of year
16
Real Estate
$113,78816
858
35,782
3,325
40,989
Machinery & Equipment
Livestock
$467,738
$719,961
12,617
15,862
$496,217
38,594
10,883
$769,438
$1,015,416
$78,844
163
5,573
60,817
34,550
48,913
$1,098,879
$20,166 land and $93,622 buildings and/or depreciable improvements.
Gifts and inheritances of property transferred into the farm business from outside.
17
17
The Statement of Owner Equity has two purposes. It allows (1) verification that the accrual income statement and
market value balance sheet are consistent (in accountants' terms they reconcile) and (2) identification of the causes of change
in equity that occurred on the farm during the year. The Statement of Owner Equity allows the farmer to determine to what
degree the changes in equity were caused by (1) earnings from the business, and nonfarm income, (in excess of withdrawals)
being retained in the business (retained earnings), (2) outside capital invested in the business or farm capital removed from
the business (called contributed/withdrawn capital) and (3) increases or decreases in the value (price) of assets owned by the
business (called change in valuation equity).
Retained earnings are an excellent indicator of farm generated financial progress.
Table 13.
STATEMENT OF OWNER EQUITY (RECONCILIATION)
240 New York Dairy Farms, 2006
Item
Average
240 Farms
Beginning of year farm net worth
Net farm income without appreciation
+ Nonfarm cash income
- Personal withdrawals & family
expenditures and income taxes,
excluding nonfarm borrowings
$1,709,346
- Note or mortgage from farm real
estate sold (nonfarm)
$2,118,682
$41,144
$259,888
6,654
8,803
73,830
79,615
RETAINED EARNINGS
Nonfarm noncash transfers to farm
+ Cash used in business from
nonfarm capital
Average Top
10% Farms19
+
$-26,031
$1,454
$2,083
12,118
31,145
0
0
CONTRIBUTED/WITHDRAWN CAPITAL
+
$13,572
Appreciation
$76,308
$66,671
- Lost capital
35,782
93,146
+
$189,076
+
$33,228
CHANGE IN VALUATION EQUITY
+
$40,526
+
$-26,475
IMBALANCE/ERROR
-
$908
-
$ 2,534
End of year farm net worth18
Change in Net Worth
Without appreciation
With appreciation
18
$1,736,505
$-49,150
$ 27,158
May not add due to rounding.
Average of 24 farms with highest rates of return to all capital (without appreciation).
19
$2,311,978
$126,625
$193,296
18
Cash Flow Summary and Analysis
Completing an annual cash flow statement is an important step in understanding and organizing the sources and
uses of funds for the business. It is also a means useful in determining accuracy and completeness of the data.
Understanding last year's cash flow is the first step in planning and managing cash flow for the current and future years.
The annual cash flow statement is structured to show net cash provided by operating activities, investing activities,
financing activities and from reserves. All cash inflows and outflows are included. Therefore the sum of net cash provided
from all four activities should be zero. Any imbalance is the error from incorrect accounting of cash flows.
Table 14.
ANNUAL CASH FLOW STATEMENT
240 New York Dairy Farms, 2006
Item
Cash Flow from Operating Activities
Cash farm receipts
- Cash farm expenses
- Extraordinary expense
= Net cash farm income
Personal withdrawals & family expenses
including nonfarm debt payments
- Nonfarm income
- Net cash withdrawals from the farm
= Net Provided by Operating Activities
Cash Flow From Investing Activities
Sale of assets:
machinery
+ real estate
+ other stock & certificates
= Total asset sales
Capital purchases:
expansion livestock
+ machinery
+ real estate
+ other stock & certificates
- Total invested in farm assets
+ Net Provided by Investment Activities
Cash Flow From Financing Activities
Money borrowed (intermediate & long term)
+ Money borrowed (short term)
+ Increase in operating debt
+ Cash from nonfarm capital used in business
+ Money borrowed - nonfarm
= Cash inflow from financing
+
+
=
Principal payments (intermediate & long term)
Principal payments (short term)
Decrease in operating debt
Cash outflow for financing
Net Provided by Financing Activities
Cash Flow From Reserves
Beginning farm cash, checking & savings
- Ending farm cash, checking & savings
= Net Provided from Reserves
Imbalance (error)
Average 240 farms
$1,281,116
1,127,305
681
$153,130
$74,498
6,654
$67,844
$85,286
$5,573
3,325
1,760
$10,657
$15,979
78,844
113,788
5,960
$214,571
$-203,914
$194,398
5,402
12,222
12,118
668
$224,809
$103,843
2,305
0
$106,148
$118,661
$20,172
$19,298
$875
$908
19
Table 15.
ANNUAL CASH FLOW DATA
240 New York Dairy Farms, 2006
Average 240 Farms
Per
Per
Total
Cow
Cwt.
350
80,862
Item
Average number of cows and cwt. milk
Accrual Operating Receipts
Milk
$1,120,121
$3,198
$13.85
Dairy cattle
91,507
261
1.13
Dairy calves
23,438
67
0.29
Other livestock
2,964
8
0.04
Crops
28,259
81
0.35
Miscellaneous receipts
66,252
189
0.82
Total
$1,332,542
$3,804
$16.48
Accrual Operating Expenses
Hired labor
$ 208,284
$ 595
$ 2.58
Dairy grain & concentrate
324,840
927
4.02
Dairy roughage
22,105
63
0.27
Nondairy feed
113
0
0.00
Professional nutritional services
531
2
0.01
Machinery hire, rent & lease
23,774
68
0.29
Machinery repairs & vehicle expense
60,893
174
0.75
Fuel, oil & grease
46,731
133
0.58
Replacement livestock
5,458
16
0.07
Breeding
18,392
53
0.23
Veterinary & medicine
52,698
150
0.65
Milk marketing
64,533
184
0.80
Bedding
24,154
69
0.30
Milking supplies
28,610
82
0.35
Cattle lease
1,253
4
0.02
Custom boarding
23,518
67
0.29
bST expense
16,491
47
0.20
Livestock professional fees
4,055
12
0.05
Other livestock expense
6,295
18
0.08
Fertilizer & lime
24,699
71
0.31
Seeds & plants
18,817
54
0.23
Spray/other crop expense
13,482
38
0.17
Crop professional fees
1,671
5
0.02
Land, building & fence repair
18,140
52
0.22
Taxes
17,033
49
0.21
Real estate rent & lease
21,321
61
0.26
Insurance
14,020
40
0.17
Utilities
32,920
94
0.41
Miscellaneous
15,346
44
0.19
Total Less Interest Paid
$1,110,177
$3,169
$13.73
Net Accrual Operating Income
(without interest paid)
$ 222,365
$ 635
$ 2.75
- Change in livestock & crop inventory
55,813
159
0.69
- Change in accounts receivable
-4,387
-13
-0.05
- Change in feed & supply inventory
-28,236
-81
-0.35
+ Change in accounts payable20
17,260
49
0.21
NET CASH FLOW
$ 216,435
$ 618
$ 2.68
- Net personal withdrawals & family exp.
66,667
190
0.82
Available for Farm Debt Payments &
Invest.
$ 149,768
$ 428
$ 1.85
- Farm debt payments
176,461
504
2.18
Cash available for Farm Investments
$ -26,693
$ -76
$ -0.33
20
Exclude change in interest account payable.
21
Average of 24 farms with highest rates of return to all capital (without appreciation).
Average Top 10% Farms21
Per
Per
Total
Cow
Cwt.
483
109,129
$1,514,796
177,011
35,439
7,874
78,874
90,937
$1,904,931
$3,135
366
73
16
163
188
$3,943
$13.88
1.62
0.32
0.07
0.72
0.83
$17.46
$ 300,079
389,470
21,766
788
903
36,313
74,913
59,068
6,585
22,825
62,398
79,651
25,478
32,184
6,073
28,263
18,160
3,736
7,314
30,150
26,588
15,977
3,931
25,251
18,569
29,906
13,545
43,862
22,467
$1,406,212
$ 621
806
45
2
2
75
155
122
14
47
129
165
53
67
13
58
38
8
15
62
55
33
8
52
38
62
28
91
46
$2,910
$ 2.75
3.57
0.20
0.01
0.01
0.33
0.69
0.54
0.06
0.21
0.57
0.73
0.23
0.29
0.06
0.26
0.17
0.03
0.07
0.28
0.24
0.15
0.04
0.23
0.17
0.27
0.12
0.40
0.21
$12.89
$ 498,719
170,467
994
-32,107
17,735
$ 377,100
70,812
$1,032
353
2
-66
37
$ 780
147
$ 4.57
1.56
0.01
-0.29
0.16
$ 3.46
0.65
$ 306,288
329,725
$ -23,437
$ 634
682
$ -48
$ 2.81
3.02
$ -0.21
20
Repayment Analysis
The second step in cash flow planning and management is to compare and evaluate debt payments planned and
made last year, and then to estimate the payments required in the current year. It is helpful to compare and evaluate a farm's
repayment position by using debt payments per unit of production and receipt/debt payment ratios. The data below are from
farms that completed summaries for both 2005 and 2006.
Table 16.
FARM DEBT PAYMENTS PLANNED
Same 191 New York Dairy Farms, 2005 & 2006
Debt Payments
Long term
Intermediate term
Short term
Operating (net reduction)
Accts. payable (net reduction)
Total
Per cow
Per cwt. 2006 milk
% of 2006 milk receipts
Same 191 Dairy Farms
2006 Payments
Planned
Planned
Made
2007
$53,300
$60,686
$57,979
120,129
119,604
125,174
2,135
2,865
3,333
6,557
9,500
6,611
670
1,459
775
$182,792
$194,114
$193,872
$466
$494
$2.00
$2.31
14%
15%
Same 21 Top 10% Farms
2006 Payments
Planned
Planned
Made
2007
$81,016
$124,869
$91,337
139,034
200,208
161,326
5,436
9,422
17,404
20,798
20,120
13,858
4,526
764
952
$250,810
$355,382
$284,878
$475
$673
$2.09
$2.96
15%
21%
The cash flow coverage ratio and debt coverage ratio measure the ability of the farm business to meet its planned
debt payments from normal operation of the business. Debt coverage ratio indicates the income generated to make payments
while cash flow coverage ratio shows the cash available to make payments.
Table 17.
COVERAGE RATIOS
Same 191 New York Dairy Farms, 2005 & 2006
Item
Cash Flow Coverage Ratio
Cash farm receipts
- Cash farm expenses
+ Interest paid (cash)
- Net personal withdrawals from farm22
Average
$1,447,185
1,272,964
70,859
73,346
Item
Debt Coverage Ratio
Net farm income (without apprec.)
+ Depreciation
+ Interest paid (accrual)
- Net personal withdrawals from farm22
Average
$ 43,593
113,998
71,155
73,346
(A) = Amount Available for Debt Service
$171,733 (A’) = Repayment Capacity
$155,400
(B) = Debt Payments Planned for 2006
(B) = Debt Payments Planned for 2006
(as of December 31, 2005)
$182,792
(as of December 31, 2005)
$182,792
(A/ B)= Cash Flow Coverage Ratio for 2006
0.94 (A’/B)= Debt Coverage Ratio for 2006
0.85
------------------------------------------------------------------------------------------------------------------------------------------------------Same 21 Top 10% Dairy Farms, 2005 & 2006
(A) = Amount Available for Debt Service
$336,056 (A’) = Repayment Capacity
$424,812
(B) = Debt Payments Planned for 2006
250,810 (B) = Debt Payments Planned for 2006
250,810
(A/ B)= Cash Flow Coverage Ratio for 2006
1.34 (A’/B)= Debt Coverage Ratio for 2006
1.69
22
Personal withdrawals and family expenditures less nonfarm income and nonfarm money borrowed. If excluded, the
coverage ratios will represent repayment ability of the farm only.
The debt to asset ratio is a good measure of the current relationship between assets and liabilities, but not the
business' ability to meet cash flow obligations. Even with a debt to asset ratio of less than 40 percent, 13 percent of the farms
had a cash flow coverage ratio less than 1.0.
Table 18.
DEBT TO ASSET RATIO VS. CASH FLOW COVERAGE
191 New York Dairy Farms, 2006
Cash Flow Coverage Ratio (Farm & Nonfarm)
Debt/Asset Ratio
<.5
.5 to .99
17.8
7.5
0.5
20.4
14.0
1.6
1 to 1.49
>=1.5
percent of farms
<40%
40 to 70%
70% & over
12.4
8.6
0.0
12.9
3.8
0.5
21
Cropping Program Analysis
The cropping program is an important part of the dairy farm business that is sometimes overlooked and often
neglected. A complete evaluation of available land resources, how they are used, and what it costs to produce the crops, are
required to evaluate alternative cropping and feed purchase choices.
Table 19.
LAND RESOURCES AND CROP PRODUCTION
240 New York Dairy Farms, 2006
Item
Land
Tillable
Nontillable pasture
Other nontillable
Total
Owned
370
43
137
550
Crop Yields
Hay crop
Corn silage
Farms
232
209
Other forage
Total forage
19
233
Average
240 Farms
Rented
360
11
5
376
Acres
378
286
Average Top 10% Farms23
Owned
Rented
Total
499
476
975
37
28
65
140
2
142
676
506
1,182
Total
730
54
142
926
Farms
24
22
Acres
449
319
2
24
282
765
Corn grain
91
153
132 bu
15
Oats
18
36
61 bu
1
Wheat
17
64
64 bu
4
Other crops
56
100
10
Tillable pasture
45
60
2
Idle
43
72
4
23
Average of 24 farms with highest rates of return to all capital (without appreciation).
210
43
60
131
113
20
56
638
Prod/Acre
3.2 tn DM
18.4 tn
6.3 tn DM
1.5 tn DM
4.4 tn DM
Prod/Acre
3.8 tn DM
21.2 tn
7.3 tn DM
1.1 tn DM
5.0 tn DM
141 bu
88 bu
66 bu
Crop acres and yields are the average for the farms reporting each crop. All but 8 of the 240 farms produced hay or
hay crop silage in 2006. Eighty-seven percent produced corn silage, 38 percent grew and harvested corn grain, and 8 percent
grew oats for grain. Although 45 farms used tillable pasture in 2006, only 39 farms reported using rotational grazing.
Yields of forage crops have been converted to tons of dry matter using dry matter coefficients reported by the
farmers. Grain production has been converted to bushels of dry grain equivalent.
Crop acres represent planted acres, therefore, any unharvested acres are reflected in lower yields per acre.
The following measures of crop management indicate how effectively the land resource is being used and how well
total forage requirements are being met. These measures are the averages of farms that grow forages.
Table 20.
CROP MANAGEMENT FACTORS
240 New York Dairy Farms, 2006
Item
Total tillable acres per cow
Total forage acres per cow
Harvested forage dry matter, tons per cow
24
Average
240 Farms
2.12
1.81
8.03
Average of 24 farms with highest rates of return to all capital (without appreciation).
Average Top
10% Farms24
2.02
1.58
7.96
22
Twenty-nine cooperators allocated direct crop related expenses to hay crop and corn. The data in Table 21 have
been compiled to show the average crop related production expenses per acre and per unit for these crops. Note that labor
and machinery costs have not been included. Total corn expenses are allocated to corn silage and corn grain based on the
proportion of acres in each crop. In Table 21, the total per tillable acre represents 233 farms that grew forages. The
expenses for hay and corn crops are for 29 farms.
Table 21.
CROP RELATED ACCRUAL EXPENSES
New York Dairy Farms, 2006
Espenses
Fertilizer & lime
Seeds & plants
Spray & other
crop exp.
Total
Average
233 Farms
Total
per
Tillable
Acre
Average
29 Farms
Average
29 Farms
Corn
Silage
Per Ton
DM
Per
Acre
Per
Ton DM
All
Corn
Per
Acre
$30.47
21.34
$23.12
11.90
$15.29
3.32
$ 49.54
45.75
$9.97
8.35
$0.21
0.21
15.12
$66.93
3.88
$38.90
0.81
$19.42
48.51
$143.80
8.76
$27.08
0.17
$0.59
Ave. Top 10% Farms:25
Average
24 Farms
Fertilizer & lime
Seeds & plants
Spray & other
crop exp.
Total
$31.03
28.53
Hay Crop
Corn
Grain
Per Dry
Shell Bu.
---------------------------------Only 3 Farms Reported-------------------------------
15.62
$75.18
25
Average of farms with highest rates of return to all capital (without appreciation).
Most machinery costs are associated with crop production and should be analyzed with the crop enterprise. Total
machinery expenses include the major fixed costs (interest and depreciation), as well as the accrual operating costs.
Machinery costs have not been allocated to individual crops, but they are calculated per total tillable acre.
Table 22.
ACCRUAL MACHINERY EXPENSES
233 New York Dairy Farms That Grow Forages, 2006
Machinery
Expense Item
Fuel, oil & grease
Machinery repairs & vehicle expense
Machine hire, rent & lease
Interest (5%)
Depreciation
Total
26
Average 233 Farms
Total
Per Tillable
Expenses
Acre
$47,481
61,801
23,656
24,605
61,630
$219,173
$63.38
82.49
31.58
32.84
82.27
$292.56
Average Top 10% Farms26
Total
Per Tillable
Expenses
Acre
$59,068
74,913
36,313
28,961
72,068
$271,324
Average of 24 farms that grow forages with highest rates of return to all capital (without appreciation).
$60.60
76.86
37.25
29.71
73.94
$278.36
23
Table 23.
CROP RELATED ACCRUAL EXPENSES FOR HAY CROP PRODUCTION PER ACRE
29 New York Dairy Farms, 2006
Item
<2.0
Hay crop, tons DM per acre
Farms reporting crop expense breakdowns
Average number hay crop acres for
farms reporting
Tons of Hay Crop Dry Matter Per Acre
2.0-2.5
2.5-3.0
>3.0
1.5
5
2.2
9
2.9
6
3.7
9
239
320
363
453
Accrual Crop Expenses Per Acre
Fertilizer & lime
Seeds & plants
Spray & other crop expenses
Total
$11.28
6.20
2.33
$19.81
$20.39
10.67
2.13
$33.19
$39.99
8.67
0.33
$48.99
$21.17
18.44
8.85
$48.46
Accrual Crop Expenses Per Ton DM
Fertilizer & lime
Seeds & plants
Spray & other crop expenses
Total
$6.85
3.86
1.55
$12.26
$9.61
4.82
0.97
$15.40
$14.00
3.06
0.11
$17.17
$5.72
5.05
2.32
$13.04
Table 24.
CROP RELATED ACCRUAL EXPENSES FOR CORN PRODUCTION PER ACRE
29 New York Dairy Farms, 2006
Item
Corn yield per acre
Farms reporting crop expense breakdowns
Average number corn acres
for farms reporting
Accrual Crop Expenses Per Acre
Fertilizer & lime
Seeds & plants
Spray & other crop expenses
Total
Accrual Crop Expenses Per Ton DM
or Bushel27
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Total
Tons Corn Silage Per Acre
<15
15-20
>20
Dry Shelled Bushels of
Corn Grain Per Acre
<110
110-140
>140
12.4
10
17.3
9
22.3
10
93
5
124
4
151
6
186
197
315
41
176
153
$59.28
45.90
43.59
$148.77
$35.48
41.05
31.61
$108.14
$52.45
49.82
68.64
$170.91
$54.95
51.42
33.58
$139.95
$38.05
39.74
33.23
$111.02
$47.85
54.37
50.53
$152.75
Per Ton DM of Corn Silage
$16.77
$6.14
$7.20
11.58
6.95
6.78
5.41
9.79
10.75
$38.10
$18.50
$23.77
Per Dry Shell Bushel
of Corn Grain
$0.60
$0.31
$0.31
0.54
0.32
0.36
0.37
0.28
0.34
$1.51
$0.91
$1.01
27
Total corn expenses are allocated to corn silage and corn grain based on the proportion of acres in each crop.
It is important to observe that as hay crop yields per acre increased, crop related expenses per acre increased. Hay
crop expenses per ton of dry matter varied as yields increased. However, the highest cost per ton of dry matter is reported
for the yield of 2.5-3.0 tons per dry matter. For corn silage, crop expenses per ton of dry matter are lowest at the middle
level of production. Corn grain shows the highest cost per acre for the high yield, with the middle yield category producing
the lowest cost per bushel. A limited number of cooperators providing data by crop limits the strength of these conclusions.
24
Dairy Program Analysis
An analysis of the dairy enterprise can be the most important step in evaluating the strengths and weaknesses of the
dairy farm business. Changes in dairy herd size and market values are identified in the table below. The change in inventory
value without appreciation is attributed to physical changes in herd size and quality. This change in inventory is included as
an accrual farm receipt when calculating profitability.
Table 25.
DAIRY HERD INVENTORY
240 New York Dairy Farms, 2006
Dairy Cows
Bred
No.
Value
Item
No.
Value
Beg. year (owned)
+ Change w/o apprec.
+ Appreciation
End year (owned)
End including leased
Average number
337
$452,243
27,742
6,727
$486,712
357
361
350
Average Top 10% Farms:28
Beg. year (owned)
+ Change w/o apprec.
+ Appreciation
End year (owned)
End including leased
Average number
440
488
503
483
$586,960
75,452
681
$663,092
103
104
$140,085
2,313
2,008
$144,405
283
(all age groups)
141
149
$195,597
14,164
-1,462
$208,299
376
(all age groups)
Heifers
Open
No.
Value
Calves
No.
Value
92
$81,042
4,331
1,426
$86,798
81
$96,897
12,927
-4,194
$105,630
114
97
107
117
87
122
$43,796
3,617
698
$48,111
$66,481
6,461
-2,217
$70,724
28
Average of 24 farms with highest rates of return to all capital (without appreciation).
Historically, there has been a strong relationship between farm size and net farm income on well-managed dairy
farms. In 2006, there was a consistent increase in net farm incomes up to the 200-cow herd size (Chart 5). Herds less than
200 cows had net farm incomes less than $21,000. Larger farms had considerably larger incomes but there was not a strong
relationship between size and income. For more information on herd size comparisons, see pages 48-57.
Chart 5.
NET FARM INCOME (WITHOUT APPRECIATION) BY HERD SIZE
240 New York Dairy Farms, 2006
$ Net Farm Income (without appreciation)
$90,000
$79,907
$80,000
$75,522
$71,561
$70,000
$60,684
$60,000
$50,000
$40,000
$30,000
$20,870
$20,000
$10,000
$12,631
$13,607
50 - 74
75 - 99
$5,133
$0
< 50
100 - 199
200 - 299
Number of Cows
300 - 399
400 - 599
>= 600
25
Total milk sold and milk sold per cow are extremely valuable measures of productivity on the dairy farm. These measures of
milk output are based on pounds of milk marketed during the year.
Table 26.
MILK PRODUCTION
240 New York Dairy Farms, 2006
Item
Average
240 Farms
Average Top
10% Farms29
Total milk sold, lbs.
8,086,224
10,912,943
23,083
22,586
Milk sold per cow, lbs.
29
Average of 24 farms with highest rates of return to all capital (without appreciation).
Farms with higher rates of production tend to have higher net farm income. This is due to more cows per farm, not
necessarily higher net farm income per cow. In 2006, farms with higher milk production per cow and more cows did not
have higher labor and management incomes per operator.
Table 27.
MILK SOLD PER COW AND FARM INCOME MEASURES
240 New York Dairy Farms, 2006
Pounds of Milk
Sold Per Cow
Number
of Farms
Average
Number
of Cows
Net Farm
Income without
Appreciation
Under 16,000
16,000 to 16,999
17,000 to 17,999
18,000 to 18,999
19,000 to 19,999
20,000 to 20,999
21,000 to 21,999
22,000 to 22,999
23,000 to 23,999
24,000 & over
31
8
13
16
24
15
21
26
29
57
114
160
82
112
158
237
441
340
418
681
$12,613
27,390
10,253
6,188
30,976
66,941
-21,381
66,443
54,871
77,454
Net Farm
Income
Per Cow
$111
171
126
55
196
282
-49
196
131
114
Labor &
Management
Income/Operator
$-24,223
-12,920
-17,070
-26,970
-14,755
-3,127
-63,961
-22,172
-27,362
-44,590
The relationship between milk output per cow and net farm income on all dairy farms is shown in Table 27 above
and is diagrammed in Charts 6 and 7 on page 26. Each spot on each scatter diagram represents one of the 240 farms.
Historically, net farm income per cow has increased as pounds of milk sold per cow increased. This relationship did
not hold true in 2006 (see Table 27 and Charts 6 and 7). As pounds of milk sold per cow increased, total net farm income
and also net farm income per cow were relatively constant. This was in part due to the low margins on dairy farms for 2006.
With profit per hundredweight close to zero, the total profit for the farm and the profit per cow were close to zero.
The trend lines on charts on the following pages were completed using regression techniques. The predictive
formulas and R2 are presented for each relationship. An R2 of 1.00 indicates a perfect relationship between the data and the
trend line. An R2 of .30 for example, is interpreted as the trend line explaining 30% of the variability in the relationship.
The higher the R2, the better the trend line fits the data. With a low R2, other factors, not measured, are important in
explaining the relationship. The very low R2 value for Chart 7 indicates that there is little statistical relationship in the 2006
data.
26
Chart 6.
NET FARM INCOME AND MILK PER COW
240 New York Dairy Farms, 2006
$1,500,000
$ Net Farm Income (without appreciation)
2
y = 0.0006x - 18.643x + 150348
2
R = 0.03
$1,000,000
$500,000
$0
-$500,000
-$1,000,000
8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000
Pounds Milk Sold Per Cow
Chart 7.
NET FARM INCOME PER COW AND MILK PER COW
240 New York Dairy Farms, 2006
$ Net Farm Income Per Cow (without appreciation)
$1,500
2
y = -2E-06x + 0.0691x - 536.56
2
R = 0.01
$1,000
$500
$0
-$500
-$1,000
-$1,500
8,000
10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000
Pounds Milk Sold Per Cow
Charts 8 and 9 look at relationships between cull rates and milk production and net farm income per cow. For the
2006 year, supplementary information concerning dairy replacements was collected from 56 participating farms. The culling
chart (Table 28) reports the decile range of reported factors for the different information that was collected. The average
culling rate was 31.7 percent, sell rate was 25.2 percent, and death rate was 6.5 percent. The average number of cows sold
for beef equaled 88, three cows were sold for dairy, and 23 cows died. Please refer to the glossary for definitions of the
different terms and how the measures were calculated.
27
Chart 8.
MILK SOLD PER COW AND CULL RATE
240 New York Dairy Farms, 2006
30,000
2
y = -6.0539x + 495.81x + 12061
2
R = 0.18
28,000
Pounds Milk Sold Per Cow
26,000
24,000
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
5
10
15
20
25
30
35
40
45
50
55
60
65
70
Cull Rate
Chart 9.
NET FARM INCOME PER COW WITHOUT APPRECIATION AND CULL RATE
240 New York Dairy Farms, 2006
$ Net Farm Income Per Cow (without appreciation)
$1,500
2
y = -0.1377x - 1.292x + 331.26
2
R = 0.05
$1,000
$500
$0
-$500
-$1,000
-$1,500
5
10
15
20
25
30
35
40
45
50
55
60
65
70
Cull Rate
Table 28.
CULLING RATE AND DAIRY REPLACEMENT INFORMATION
New York Dairy Farms, 2006
Sell
Death
Cull
Value of
Value of Animals Percent of Replacements
Percent of Heifers
Decile Rate
Rate
Rate
Cows Sold
Purchased
Purchased
Custom Raised
- - - - - - - - -238 Farms30- - - - - - - -$/head (44 Farms)
- - - - - - - - - - - - 56 Farms30 - - - - - - - - - - 1
7%
0%
12%
$141
$809
0%
0%
2
15
2
20
377
1,134
0
0
3
18
3
24
463
1,379
0
0
4
20
4
27
513
1,573
0
0
5
23
5
29
563
1,704
0
0
6
25
6
32
606
1,928
0
0
7
27
7
34
681
2,117
0
0
8
29
9
35
798
2,386
1
7
9
32
10
38
1,088
3,270
7
38
10
38
17
45
2,765
4,231
40
90
30
238 participating farms provided culling information. Fifty-six farms provided supplemental information on heifer
acquisitions.
28
Cost of Producing Milk
The cost of producing milk has been compiled below using the whole farm method. The following steps are used in
the calculations.
1.
The cost of expansion livestock is added to total accrual operating expenses to offset any related inventory increase
included in accrual receipts.
2.
Accrual milk sales are deducted from total accrual receipts to get total accrual nonmilk receipts, which are used to
represent total nonmilk operating costs. This assumes that costs equal revenues for nonmilk costs.
3.
Total accrual nonmilk receipts are subtracted from total accrual operating expenses including expansion livestock to
calculate the operating cost of producing milk.
4.
Machinery depreciation and building depreciation are added to operating costs to determine the purchased inputs
cost of producing milk.
5.
The opportunity cost of equity capital, operator's labor and operator's management and the value of unpaid family
labor are added to all other costs to obtain the total cost of producing milk. This cost includes all the operating,
depreciation, and imputed costs of producing milk.
Table 29.
COST OF PRODUCING MILK, WHOLE FARM METHOD
240 New York Dairy Farms, 2006
Item
Total Accrual Operating Expenses
Expansion Livestock, Accrual
1.
Total Accrual Operating Expenses,
Including Expansion Livestock
Total Accrual Receipts
Milk Sales, Accrual
Average
240 Farms
$1,172,956
+ 15,954
Average Top
10% Farms31
$1,492,564
+ 32,096
$1,188,910
$1,332,542
- 1,120,121
$1,524,660
$1,904,931
- 1,514,796
2.
Total Accrual Nonmilk Receipts
- $212,421
-$390,135
3.
Operating Cost of Producing Milk
Machinery Depreciation
Building Depreciation
Extraordinary Expense
+
+
+
$976,489
60,817
40,989
681
$1,134,525
+72,068
+ 47,658
+ 657
4.
Purchased Inputs Cost of Producing Milk
Family Labor Unpaid ($2,200/month)
Real Interest on Equity Capital
Value of Operator’s Labor & Management
$1,078,976
+
6,057
+ 86,056
+ 66,503
$1,254,908
+ 5,165
+110,767
+ 68,831
5.
Total Costs of Producing Milk
$1,237,592
$1,439,671
6.
Costs Per Cwt.:
Cwt. Milk Sold
Operating Cost Per Cwt.
Purchased Inputs Cost Per Cwt.
Total Cost Per Cwt.
31
80,862
$12.08
$13.34
$15.30
Average of 24 farms with highest rates of return to all capital (without appreciation).
109,129
$10.40
$11.50
$13.19
29
Costs of producing milk per hundredweight are presented for eight expenditure categories in Table 30. The whole
farm method assumption that accrual nonmilk receipts represent nonmilk operating costs is used in computing net costs. A
$17,652 average increase in crop inventories per farm, ($0.22 per hundredweight of milk), is included in crop sales on the
240 farms. The top 10 percent farms had a $60,971 average increase in crop inventories per farm ($0.56 per hundredweight
of milk).
Table 30.
ITEMIZED COSTS OF PRODUCING MILK PER HUNDREDWEIGHT
BASED ON WHOLE FARM DATA
240 New York Dairy Farms, 2006
Average
240 Farms
Item
Dairy grain and concentrate
Dairy roughage
Nondairy feed
Professional nutritional services
Total feed expense
Crop expense
- Crop sales and government receipts32
Net Feed and Crop Expense
$4.02
0.27
0.00
0.01
$3.57
0.20
0.01
0.01
$4.30
0.73
0.87
2.58
0.90
Machine repairs, fuel and hire
Machinery depreciation
- Gas tax refunds and custom work
Net Machinery Expense
1.62
0.75
0.05
Replacement and expansion cattle purchases
- Sales and inventory growth
Net Cattle Purchases
0.26
1.46
Milk marketing costs
All other livestock expense excluding purchases
Net Livestock Expense
0.80
2.17
Real estate repairs, rent and taxes
Building depreciation
Total Real Estate Expense
0.69
0.51
Interest paid
Interest on equity
Total Interest Expense
0.78
1.06
Other operating and miscellaneous expenses
- Miscellaneous income
Net Miscellaneous Expenses
0.77
0.25
32
$3.79
0.71
1.32
$4.16
Hired labor
Operator's and family labor
Total Labor Expense
Total Cost of Producing Milk
Purchased Inputs Cost
Total Operating Cost
Average Top
10% Farms33
2.75
0.68
$3.48
$3.43
1.56
0.66
0.03
$2.32
$2.19
0.35
2.02
$-1.20
$-1.67
0.73
1.89
$2.97
$2.62
0.67
0.44
$1.20
$1.11
0.79
1.02
$1.84
$1.81
0.73
0.20
$ 0.52
$0.53
$15.30
$13.34
$12.08
$13.19
$11.50
$10.40
Non-crop related government payments may bias the results.
Average of 24 farms with highest rates of return to all capital (without appreciation).
33
$3.18
30
Costs of producing milk per hundredweight are presented in the table below for 191 farms that participated both in
2005 and 2006. Costs of production increased in net machinery, net livestock, real estate, and interest expense categories
when 2006 data were compared to 2005.
Table 31.
ITEMIZED COSTS OF PRODUCING MILK PER HUNDREDWEIGHT
BASED ON WHOLE FARM DATA
Same 191 New York Dairy Farms, 2005 & 2006
Item
2005
Dairy grain and concentrate
Dairy roughage
Nondairy feed
Professional nutritional services
Total feed expense
Crop expense
- Crop sales and government receipts34
$4.10
0.28
0.00
0.00
$4.03
0.29
0.00
0.00
$4.38
0.73
0.72
Net Feed and Crop Expense
2.66
0.81
Machine repairs, fuel and hire
Machinery depreciation
- Gas tax refunds and custom work
Net Machinery Expense
1.56
0.81
0.05
Replacement and expansion cattle purchases
- Sales and inventory growth
Net Cattle Purchases
0.27
1.43
Milk marketing costs
All other livestock expense excluding purchases
Net Livestock Expense
0.75
2.16
Real estate repairs, rent and taxes
Building depreciation
Total Real Estate Expense
0.75
0.51
Interest paid
Interest on equity
Total Interest Expense
0.63
0.99
Other operating and miscellaneous expenses
- Miscellaneous income
Net Miscellaneous Expenses
0.72
0.22
34
Non-crop related government payments may bias the results.
-1.7%
3.6%
$4.32
0.70
0.84
$4.39
Hired labor
Operator's and family labor
Total Labor Expense
Total Cost of Producing Milk
Purchased Inputs Cost
Total Operating Cost
Average Price Received for Milk
Percent
Change
2006
-1.4%
$4.18
-4.8%
$3.44
-0.9%
$2.28
-1.7%
$-1.21
-4.3%
$3.00
3.1%
$1.22
-3.2%
$1.80
11.1%
$0.50
$0.49
2.0%
$15.33
$13.53
$12.20
$15.98
$15.19
$13.36
$12.10
$13.84
-14.0%
-1.3%
-0.8%
-13.4%
2.63
0.81
$3.47
1.60
0.73
0.05
$2.32
0.27
1.48
$-1.16
0.80
2.20
$2.91
0.70
0.52
$1.26
0.78
1.02
$1.62
0.75
0.26
31
The three measures of the accrual cost of producing milk calculated on a per cow and per hundredweight basis are
compared with accrual receipts from milk sales in Table 32.
Table 32.
COST OF PRODUCING MILK, ACCRUAL RECEIPTS FROM DAIRY, AND PROFITABILITY
240 New York Dairy Farms, 2006
Average Top 10% Farms35
Total
Per Cow
Per Cwt.
Average 240 Farms
Total
Per Cow
Per Cwt.
Item
Accrual Cost of Producing Milk
Operating Cost
Purchased Inputs Cost
Total Cost
Accrual Receipts from Milk
Net Milk Receipts
Profitability
Net Farm Income without
Appreciation
Net Farm Income with
Appreciation
$976,489
1,078,976
1,237,592
$2,788
3,080
3,533
$12.08
13.34
15.30
$1,134,525
1,254,908
1,439,671
$2,348
2,597
2,980
$10.40
11.50
13.19
$1,120,121
1,055,588
$3,198
2,706
$13.85
13.05
$1,514,796
1,435,145
$3,135
2,853
$13.88
13.15
$41,144
$117
$0.51
$259,888
$538
$2.38
$117,452
$335
$1.45
$326,558
$676
$2.99
35
Average of 24 farms with highest rates of return to all capital (without appreciation).
The operating cost of producing milk on all 240 dairy farms averaged $12.08 per hundredweight, leaving $1.77 to
cover depreciation, unpaid labor and operator resources.
The total cost of producing milk on all 240 dairy farms averaged $15.30 per hundredweight, $1.45 more than the
average price received for milk sold from these farms during 2006. The imputed costs or charge for the operator's labor,
management and equity capital averaged $1.89 per hundredweight in 2006. But the farmer received $0.44 per hundredweight
for these inputs. The 24 most profitable farms held their operating costs to $10.40 per hundredweight and their total cost of
producing milk averaged $13.19 per hundredweight. This left a profit of $0.69 per hundredweight of milk sold.
The strong relationship between milk output per cow and the total cost of producing milk is shown in Table 33 and
Chart 10 on page 32. Farms selling less than 19,000 pounds of milk per cow had average total costs of production of $18.58
per hundredweight while those selling 19,000 pounds and over averaged $15.46 for a difference of $3.12 per hundredweight.
Table 33.
FARM COST OF PRODUCING MILK BY MILK SOLD PER COW
240 New York Dairy Farms, 2006
Pounds Milk
Sold Per Cow
Under 16,000
16,000-16,999
17,000-17,999
18,000-18,999
19,000-19,999
20,000-20,999
21,000-21,999
22,000-22,999
23,000-23,999
24,000 & over
Costs per Hundredweight
Operating Costs
Costs of Producing Milk
Hired
Dairy Grain &
Total
Purchased
Labor
Concentrate
Operating
Inputs
Total
$1.81
$4.19
$12.27
$13.75
$19.27
2.86
3.92
12.22
13.98
17.96
1.50
4.26
11.99
13.60
19.60
1.10
4.51
12.38
13.43
17.48
1.51
4.20
11.35
12.89
16.35
2.44
3.69
11.16
12.66
15.29
2.80
4.38
12.81
14.12
16.15
2.50
4.05
11.58
13.10
15.42
2.55
3.84
11.90
13.09
14.78
2.74
3.97
12.18
13.35
14.79
Accrual
Receipts
From Milk
Per Cwt.
$14.59
15.00
14.32
13.73
13.89
14.03
13.90
13.97
13.65
13.80
Return Per Cwt.
To Operator’s
Labor, Mgmt. &
Capital
$0.10
0.83
0.19
0.23
0.79
1.25
0.26
0.81
0.52
0.43
32
Chart 10.
PRODUCTION COST BY MILK PER COW
240 New York Dairy Farms, 2006
24
$19.27
$19.60
$17.96
$17.48
6.00
$16.15
$15.29
4.05
3.46
1.48
1.76
1.61
1.05
12.27
12.22
11.99
12.38
18,000 18,999
12
3.98
17,000 17,999
14
5.52
16,000 16,999
16
$16.35
<16,000
Dollars per Cwt.
18
1.50
11.35
11.16
$14.78
$14.79
1.52
1.69
1.19
1.44
1.17
11.58
11.90
12.18
2.03
2.63
1.54
$15.42
23,000 23,999
20
22,000 22,999
22
2.32
1.31
10
8
6
12.81
4
2
>24,000
21,000 21,999
20,000 20,999
19,000 19,999
0
Pounds Milk Sold Per Cow
Operating Cost
Depreciation
Value of Family Resources
The relationship between total cost of producing milk and milk sold per cow is diagrammed in Chart 11. It shows
that as milk sold per cow increases, on the average, total cost of production generally decreases.
Chart 11.
TOTAL COST OF PRODUCING MILK PER CWT. AND MILK PER COW
240 New York Dairy Farms, 2006
Total Cost of Producing Milk, $/Cwt.
40
35
y = 3E-08x2 - 0.0016x + 37.834
R2 = 0.36
30
25
20
15
10
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Pounds Milk Sold Per Cow
24,000
26,000
28,000
30,000
33
Data in Table 34 and Chart 12 show that the average total cost of production generally declines as herd size
increases. This is attributable to spreading fixed costs over more units of output.
Total operating costs are lowest at the 200-299 herd size group followed by the two lowest herd size categories.
Hired labor cost generally increases with herd size, while purchased dairy grain and concentrate are not related to herd size.
Table 34.
FARM COST OF PRODUCING MILK BY HERD SIZE
240 New York Dairy Farms, 2006
Number of
Cows
Under 50
50 to 74
75 to 99
100 to 199
200 to 299
300 to 399
400 to 599
600 and over
Costs per Hundredweight
Operating Costs
Costs of Producing Milk
Hired
Dairy Grain &
Total
Purchased
Labor
Concentrate
Operating
Inputs
Total
$0.54
$4.24
$11.27
$13.05
$20.66
0.77
4.04
11.23
12.58
18.78
1.44
4.19
11.38
12.85
18.10
1.86
4.13
11.66
13.18
17.02
2.00
3.87
11.07
12.21
14.73
2.75
4.07
12.08
13.29
15.37
2.41
3.89
11.80
13.11
15.05
2.84
4.03
12.33
13.56
14.92
Accrual
Receipts
From Milk
$13.77
13.70
13.69
13.92
13.72
14.05
13.80
13.85
Return Per Cwt.
To Operator’s
Labor, Mgmt. &
Capital
$0.45
0.30
0.22
0.53
1.38
0.73
0.65
0.28
Chart 12.
PRODUCTION COST BY HERD SIZE
240 New York Dairy Farms, 2006
24
22
$20.66
20
$18.78
$18.10
$17.02
Dollars per Cwt.
18
16
7.61
6.20
$14.73
5.25
14
12
3.84
2.52
1.78
1.35
1.47
1.52
11.27
11.23
11.38
11.66
11.07
<50
50-74
75-99
100-199
200-299
$14.92
$15.37
$15.05
2.08
1.94
1.21
1.31
12.08
11.80
12.33
300-39
400-599
>600
1.14
1.36
1.23
10
8
6
4
2
0
Average Number of Cows
Operating Cost of Production
Depreciation
Value of Family Resources
34
The importance of cost control and its impact on farm profitability are illustrated in Chart 13. As the total cost of
producing milk per hundredweight increased, net farm income per cow fell. All farms had a positive net farm income per
cow until the total cost of producing milk exceeded $14 per hundredweight. The majority of the farms with costs greater than
$18 per hundredweight experienced negative net farm incomes per cow.
Chart 13.
NET FARM INCOME PER COW AND TOTAL COST OF PRODUCING MILK PER
HUNDREDWEIGHT
240 New York Dairy Farms, 2006
$ Net Farm Income/Cow (without appreciation)
1,500
1,000
y = 2.8658x2 - 178.64x + 2334.2
R2 = 0.32
500
0
-500
-1,000
-1,500
10
15
20
25
30
Total Cost of Producing Milk, $/Cwt.
35
40
35
Cost of Producing Milk (continued)
A ten-year comparison of the average costs and returns of producing milk per hundredweight is presented in Table
35 on page 36. Average individual operating and overhead expenses per hundredweight of milk sold are reported on all
specialized dairy farms included in the New York State Summary from 1997 through 2006. In 2006 the average operating
cost of producing milk decreased 1.4 percent after decreasing three percent from 2004 to 2005. The average return per
hundredweight to operator labor, management, and capital was $1.91 lower in 2006, 81 percent below 2005. In only three
years during the last ten years has milk price exceeded the total cost of producing milk. The years were 1998, 2001, and
2004.
Hired labor expense per hundredweight has increased consistently from 1997 to 2004, remained constant in 2005
and decreased eight percent in 2006. Hired labor expense was $1.97 in 1997 and has risen to $2.58 in 2006. Thus, even as
pounds of milk sold per worker have increased from 784,604 in 1997 to 987,530 in 2006, labor expense per worker has
increased even more rapidly. Some of this effect is due to increasing farm size where a larger portion of the labor force is
comprised of hired workers. Another effect is an increase in hired labor cost per worker as shown by a 35 percent increase in
hired labor expense per hired worker equivalent from 1997 to 2006.
Purchased feed expense per hundredweight of milk can fluctuate greatly, as much as $1.00 per hundredweight. At
$3.91 in 2000, it was at its lowest in the past ten years. In 2004, purchased feed expense was at its highest in the past ten
years at $4.88, due mostly to drought conditions during the growing season. In 2006, purchased feed expense dropped to
$4.30 per hundredweight.
Interest paid on debt per hundredweight of milk sold has fluctuated over this period. In 1997, interest expense was
$0.90 per hundredweight. In 2003, interest expense was at a ten-year low of $0.56 per hundredweight, increasing to $0.78 in
2006. Property taxes per hundredweight of milk have decreased by 9 percent during this ten-year period. Property taxes
were $0.23 per hundredweight in 1997, but were only $0.21 in 2006. This is due to productivity increases and more of the
land resources being rented, rather than owned, and fewer acres per cow.
A ten-year comparison of selected average business factors for all specialized DFBS farms is presented in Table 36
on page 37. The reader is reminded that the same farms are not in the survey each year. Average cow numbers are up 84
percent, tillable acres have increased 58 percent, and milk sold per farm has jumped 106 percent since 1997. Capital
investment per cow has increased 25 percent over the last ten years. Labor and management income per operator decreased
148 percent in 2006 compared to 2005, farm net worth increased three percent, and percent equity decreased slightly in 2006
compared to 2005.
Hay crop yields were 2.5 tons dry matter per acre in 1997 and 3.2 tons dry matter per acre in 2006. Corn silage
yields, as fed, have varied more widely and were 18.4 tons per acre in 2006. As yields increased, fertilizer and lime expense
increased $2.00 per tillable acre, from $28 to $30 per acre. Pounds of milk sold per cow increased by 12 percent, from
20,651 pounds in 1997 to 23,083 pounds in 2006.
Average number of workers per farm increased by 3.18 and operators/managers per farm increased by 0.03. Cows
per worker equivalent increased from 38 in 1997 to 43 in 2006, but labor cost per cow increased from $598 to $757 over the
same time period.
The asset turnover ratio ranged from 0.52 to 0.64. Total accrual receipts as a proportion of total farm assets equals
asset turnover ratio. Percent equity was 57 percent in 1997, was relatively constant over the next eight years, and increased
to 62 percent in 2006.
36
Table 35.
TEN YEAR COMPARISON: AVERAGE COST OF PRODUCING MILK PER HUNDREDWEIGHT
New York Dairy Farms, 1997 to 2006
Item
1997
1998
1999
2000
2001
2002
2003
Operating Expenses
Hired labor
$1.97
$2.06
$2.14
$2.25
$2.41
$2.44
$2.51
Purchased feed
4.63
4.18
3.96
3.91
4.25
4.10
4.29
Machinery repair, vehicle expense & rent
.94
1.12
1.18
1.06
1.21
1.01
.91
Fuel, oil & grease
.28
.25
.24
.34
.32
.28
.33
Replacement livestock
.18
.24
.24
.23
.20
.16
.15
Breeding fees
.15
.16
.17
.17
.19
.21
.19
Veterinary & medicine
.41
.45
.47
.51
.54
.56
.56
Milk marketing
.52
.53
.49
.69
.63
.65
.69
Other dairy expenses
1.05
1.09
1.13
1.16
1.26
1.25
1.30
Fertilizer & lime
.33
.35
.35
.29
.33
.27
.26
Seeds & plants
.21
.22
.20
.19
.20
.20
.20
Spray & other crop expense
.23
.24
.24
.22
.25
.22
.19
Land, building & fence repair
.19
.27
.27
.21
.26
.19
.14
Taxes
.23
.21
.21
.20
.21
.20
.21
Insurance
.16
.17
.16
.16
.14
.16
.15
Utilities (farm share)
.35
.32
.31
.32
.33
.34
.34
Interest paid
.90
.89
.83
.95
.82
.61
.56
Misc. (including rent)
.38
.41
.44
.45
.42
.44
.40
Total Operating Expenses
$13.12
$13.15
$13.02
$13.31
$13.98
$13.27
$13.39
Less: Nonmilk cash receipts
1.14
1.18
1.44
1.83
1.49
1.91
1.57
Increase in grown feed & supplies
.07
.25
.25
.11
.10
.12
.27
Increase in livestock
.15
.22
.11
.06
.52
.23
.09
OPERATING COST OF MILK PRODUCTION
$11.76
$11.50
$11.22
$11.31
$11.87
$11.01
$11.46
Overhead Expenses
Depreciation: machinery & buildings
$0.95
$1.08
$1.14
$1.20
$1.30
$1.39
$1.23
Unpaid labor
.13
.11
.11
.10
.10
.08
.10
Operator(s) labor 36
.79
.74
.80
.79
.74
.74
.70
Operator(s) management (5% of cash receipts)
.73
.82
.83
.76
.87
.75
.73
Interest on farm equity capital (5%)
.87
.85
.86
.88
.91
.89
.85
Total Overhead Expenses
$3.47
$3.60
$3.74
$3.73
$3.92
$3.85
$3.61
TOTAL COST OF MILK PRODUCTION
$15.23
$15.10
$14.96
$15.04
$15.79
$14.86
$15.07
AVERAGE FARM PRICE OF MILK
$13.65
$15.60
$14.91
$13.38
$15.98
$12.98
$13.24
Return per cwt. to operator labor, capital & mgmt.
$0.81
$2.91
$2.44
$0.77
$2.71
$0.50
$0.45
Rate of return on farm equity capital
-4.1%
8.0%
4.7%
-4.4%
6.0%
-5.6%
-5.7%
36
1997 = $1,550/month, 1998 = $1,600/month, 1999 = $1,800/month, 2000 = $1,900/month, 2001 = $2,000/month, 2002 = $2,100/month,
2003 through 2005 = $2,200/month, and 2006 = $2,300/month of operator labor.
2004
2005
2006
$2.67
4.88
1.09
.41
.16
.21
.59
.72
1.27
.30
.24
.20
.21
.22
.16
.36
.57
.43
$14.67
1.70
.17
.22
$12.58
$2.66
4.37
1.07
.53
.11
.22
.62
.76
1.32
.34
.22
.19
.25
.23
.16
.39
.65
.37
$14.54
1.96
.12
.21
$12.25
$2.58
4.30
1.04
.58
.07
.23
.65
.80
1.29
.31
.23
.19
.22
.21
.17
.41
.78
.45
$14.51
1.94
.22
.27
$12.08
$1.32
.07
.67
.90
.92
$3.88
$16.46
$16.64
$2.67
6.0%
$1.32
.06
.61
.90
1.02
$3.91
$16.16
$15.98
$2.35
4.1%
$1.26
.07
.63
.79
1.06
$3.81
$15.89
$13.85
$0.44
-4.6%
37
Table 36.
TEN YEAR COMPARISON: SELECTED BUSINESS FACTORS
New York Dairy Farms, 1997 to 2006
Item
Number of farms
Cropping Program
Total tillable acres
Tillable acres rented
Hay crop acres
Corn silage acres
Hay crop, tons DM/acre
Corn silage, tons/acre
Fertilizer & lime exp./tillable acre
Machinery cost/cow
Dairy Analysis
Number of cows
Number of heifers
Milk sold, cwt.
Milk sold/cow, lbs.
Purchased dairy feed/cwt. milk
Purchased grain & concentrate as
% of milk receipts
Purchased feed & crop exp/cwt.milk
Capital Efficiency
Farm capital/cow
Real estate/cow
Machinery investment/cow
Asset turnover ratio
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
Labor cost/cow
Hired labor exp./hired worker equiv.
Profitability & Financial Analysis
Labor & mgmt. income/operator
Farm net worth, end year
Percent equity
1997
253
1998
305
1999
314
2000
294
2001
228
2002
219
2003
201
2004
200
2005
225
2006
240
462
207
219
156
2.5
16.1
$28
$429
497
232
239
175
3.1
18.0
$31
$471
516
234
248
186
2.9
16.3
$32
$502
566
262
274
192
3.3
15.1
$27
$513
618
290
302
210
2.8
16.5
$32
$554
660
337
323
232
3.1
15.4
$27
$520
659
323
321
233
3.2
17.2
$28
$497
701
345
339
245
3.5
17.7
$31
$565
729
365
361
246
3.2
18.8
$33
$624
730
360
366
249
3.2
18.4
$30
$618
190
139
39,309
20,651
$4.63
210
155
43,954
20,900
$4.18
224
164
47,932
21,439
$3.96
246
186
52,871
21,516
$3.91
277
207
60,290
21,762
$4.25
297
226
66,177
22,312
$4.10
314
240
70,105
22,302
$4.27
334
260
73,767
22,070
$4.86
340
270
78,250
22,998
$4.37
350
283
80,862
23,083
$4.29
33%
$5.39
26%
$5.00
25%
$4.75
27%
$4.61
25%
$5.03
30%
$4.79
30%
$4.92
27%
$5.60
26%
$5.12
29%
$5.02
$6,196
$2,650
$1,108
0.52
$6,161
$2,537
$1,118
0.61
$6,368
$2,562
$1,163
0.59
$6,535
$2,615
$1,225
0.54
$6,755
$2,713
$1,222
0.63
$6,794
$2,612
$1,261
0.53
$6,748
$2,722
$1,208
0.54
$7,010
$2,809
$1,226
0.64
$7,508
$2,950
$1,314
0.60
$7,762
$3,030
$1,384
0.52
5.01
1.60
784,604
38
$598
$25,241
5.35
1.62
821,565
39
$609
$31,092
5.71
1.76
839,432
39
$653
$27,910
6.11
1.83
865,325
40
$674
$29,309
6.72
1.94
897,167
41
$706
$31,448
7.21
1.82
917,854
41
$725
$31,755
7.50
1.86
934,733
42
$738
$32,659
7.97
1.64
925,553
42
$752
$33,311
8.18
1.60
956,698
42
$765
$33,539
8.19
1.63
987,530
43
$757
$34,071
$-1,424
$685,665
57%
$55,917
$798,297
59%
$42,942
$865,626
58%
$-2,908
$942,881
57%
$45,479
$-14,243
$-15,360
$78,061
$64,745
$-31,269
$1,181,055 $1,173,836 $1,207,964 $1,466,674 $1,690,427 $1,736,505
60%
57%
56%
60%
63%
62%
38
The average or mean price per hundredweight of milk sold is calculated by dividing gross milk receipts by total
pounds of milk sold. The average price for the 240 farms was $13.85 but there was considerable variation among the
individual farms. The variation in average price received and the distribution of farms around the mean is shown below.
Chart 14.
VARIATION IN AVERAGE MILK PRICE
240 New York Dairy Farms, 2006
35%
33%
30%
25%
Percent of Farms
25%
20%
17%
15%
11%
10%
7%
7%
5%
0%
< 13.00
13.00 - 13.50
13.50 - 14.00
14.00 - 14.50
14.50 - 15.00
>15.00
Average Price Received for Milk, $/Cwt.
Fifty-eight percent of the farms received from $13.00 to $14.00 per hundredweight of milk sold. Thirty-five percent
of the farms received $14.00 or more and 7 percent received less than $13.00 per hundredweight. Location and organization
of markets are factors contributing to the difference in average milk prices on these dairy farms. Management practices on
farms as well as in milk companies also affect farm milk prices. Seasonality of production and milk components are two
variables that affect milk price. More milk price analysis by component can be found on pages 40 and 41.
The accrual operating expenses most commonly associated with the dairy enterprise are listed in the table below.
Evaluating these costs per unit of production enables the comparison of different size dairy farms for strengths and areas for
improvement.
Table 37.
DAIRY RELATED ACCRUAL EXPENSES
240 New York Dairy Farms, 2006
Average 240 Farms
Per Cow
Per Cwt.
$927
$4.02
63
.27
$990
$4.29
Item
Purchased dairy grain & concentrate
Purchased dairy roughage
Total Purchased Dairy Feed
Purchased grain & concentrate as %
of milk receipts
29%
Purchased feed & crop expense
$1,158
$5.02
Purchased feed & crop expense as
% of milk receipts
37%
Breeding
$53
$.23
Veterinary & medicine
150
.65
Milk marketing
184
.80
Bedding
69
.30
Milking Supplies
82
.35
Cattle lease
4
.02
Custom boarding
67
.29
bST expense
47
.20
Other livestock expense
30
.13
37
Average of 24 farms with highest rates of return to all capital (without appreciation).
Average Top 10% Farms37
Per Cow
Per Cwt.
$806
$3.57
45
.20
$851
$3.77
27%
$1,010
$4.47
34%
$47
129
165
53
67
13
58
38
23
$.21
.57
.73
.23
.29
.06
.26
.17
.10
39
Feed costs per cow and per hundredweight of milk sold are influenced by a number of factors. These cost measures
are affected by the amount of homegrown grains fed, quality and quantity of the roughage harvested, and the number of
youngstock. Feed costs are also influenced by the farmer's ability to purchase grains and concentrates at reasonable prices
and to balance nutrients fed with energy and protein requirements.
Purchased dairy grain and concentrates per cow is calculated by dividing the total accrual expenses for dairy grains
and concentrates purchased by the average number of cows. Because this also included the amount spent for calf and heifer
feed, it actually represents feed cost for one cow and associated replacements being raised (averaged 0.79 animals in 2005).
Purchased feed and crop expense per hundredweight of milk is one of the most useful feed cost measures because it
accounts for some of the variations in feeding and cropping programs, and milk production between herds. It includes all
purchased feeds used on the farm, and it includes crop expenses that are associated with feed production. It does not
represent total feed costs because machinery, labor and other costs of producing feed crops are excluded.
Purchased grain and concentrates as percent of milk sales is calculated by dividing feed purchased by milk receipts.
This is another useful measure of feed efficiency although variations in homegrown grains fed, heifers fed, and milk prices
can have an impact. Purchased feed and crop expense as percent of milk sales removes much of the variation caused by the
feeding of home grown grains.
Cost control has an important effect on farm profitability. The relationship between purchased feed and crop
expense per hundredweight of milk and farm profitability is shown below. On average, farms with feed and crop expenses
exceeding $6.00 reported well below average profits. Net milk income over purchased concentrate per cow shows a similar
relationship when compared to rate of return on assets without appreciation (Chart 15).
Table 38.
PURCHASED FEED AND CROP EXPENSE PER HUNDREDWEIGHT
OF MILK AND FARM INCOME MEASURES
240 New York Dairy Farms, 2006
Feed & Crop
Expense
Per Cwt.
of Milk
$6.50 or more
6.00 to 6.49
5.50 to 5.99
5.00 to 5.49
4.50 to 4.99
4.00 to 4.49
Less than 4.00
Number
of
Farms
30
14
31
56
47
32
30
Number
of
Cows
91
378
436
358
513
368
220
Forage
Dry Matter
Harvested
Per Cow
7.3
5.3
7.6
8.0
8.9
8.6
7.5
Pounds
Milk
Per Cow
18,831
19,862
23,414
22,945
24,356
23,606
21,572
Net Farm
Income
Without
Appreciation
$-6,342
-56,041
39,456
34,417
46,274
104,915
72,227
Labor &
Management
Income Per
Operator
$-30,046
-96,646
-37,781
-30,694
-54,749
3,055
1,530
Labor &
Management
Per Operator
Per Cow
$-330
-256
-87
-86
-107
8
7
Chart 15.
NET MILK INCOME OVER PURCHASED CONCENTRATE PER COW VERSUS
RETURN ON ASSETS
240 New York Dairy Farms, 2006
$ Net Milk Income Over Purchased
Concentrate/Cow
3,000
2,500
0.0247x
y = 1838.9e
2
R = 0.29
2,000
1,500
1,000
500
0
-30
-25
-20
-15
-10
-5
0
Rate Return on Assets, without appreciation
5
10
15
40
Milk Income and Marketing Expense Breakdown
Starting January 1st, 2000, the Northeast switched to multiple component pricing, which changed the format of the
milk check and how farmers received payment for their milk. To examine the breakdown of the gross milk income and the
marketing expenses, 170 farms filled out a detailed form including all the different sources of income for milk sales and the
milk marketing expenses on an accrual basis. This information is reported in the following two tables. The tables are
divided into six different sections, each representing a different area of income or expense. The cumulative total for these six
sections is the net price received on farms. MILC payments are not included as a milk receipt, but as a government receipt.
Table 39 reports the averages for the 170 farms providing the data. Table 40 on page 41 contains the quintile
averages for each of the individual lines of the report. This table is in a farm business chart format with each item sorted
independently and ranked by fifths. Numbers for the different sections will not add to the totals for that quintile or to the net
price received because each item is sorted independently. This table shows the range of income and expenses received by
farms for all the different sections. More milk price information was presented on page 38.
Table 39.
AVERAGE38 MILK INCOME AND MARKETING REPORT
170 New York Dairy Farms, 2006
BASE FARM PRICE
Butterfat
Protein
Solids
Pounds
Percent
Price/Pound
Total
357,587.38
293,026.90
558,465.98
3.66%
3.00%
5.71%
$1.33
$2.09
$0.17
$474,166.53
$613,127.16
$97,008.96
$/Cwt of Milk
$4.85
$6.27
$0.99
Total Component Contribution
PPD
$12.12
9,772,182.68
$76,084.46
$0.78
Base Farm Price
Premiums
Quality
Volume
Market Premiums
$12.90
$19,637.86
$25,345.70
$34,729.80
Total Premiums
$0.20
$0.26
$0.36
$0.82
BASE FARM PRICE + PREMIUM
Deductions
Promotion
Hauling + Stop Charges.
Market Fees & Coop Dues
$13.71
$14,901.94
$51,558.09
$10,305.89
Total Deductions
$0.15
$0.53
$0.11
$0.79
BASE FARM PRICE + PREMIUMS – DEDUCTIONS
Marketing Programs
Futures Contracts, Forward Contracting, Etc.
$12.93
$3,295.10
Total Marketing Income
Patronage Dividends
$0.03
$0.03
$6,115.92
$0.06
NET PRICE RECEIVED ON FARM, ALL SOURCES
$13.02
$0.25
PPD – Hauling, per cwt.
$0.61
PPD – Hauling + Market Premiums, per cwt.
$0.81
Net Marketing Value, per cwt. (PPD + Total Premiums - Total Deductions)
38
Each calculation of an average is independent of all others. Therefore, math operations on the detail will not result in the
totals. However, detail in the “$/Cwt of Milk” column will result in the totals. Average herd size for these 170 farms is 417
cows.
41
Table 40.
MILK PRICE INFORMATION BY QUINTILE39
(Each Category Sorted Independently)
170 New York Dairy Farms, 2006
Butterfat, %
Protein, %
Other Solids, %
Lowest
Quintile
3.49
2.89
5.50
3.64
2.97
5.69
3.71
3.02
5.72
3.79
3.08
5.75
Highest
Quintile
4.11
3.22
5.81
Butterfat, $ per Cwt.
Protein, $ per Cwt.
Other solids, $ per Cwt.
Total Component Value per Cwt.
4.66
6.08
0.95
$11.78
4.82
6.21
0.98
$12.07
4.92
6.32
1.00
$12.23
5.04
6.43
1.00
$12.43
5.40
6.76
1.06
$13.14
PPD, $ per Cwt.
0.56
0.65
0.75
0.89
1.22
Base Farm Price per Cwt.
Quality, $ per Cwt.
Volume, $ per Cwt.
Market premium, $ per Cwt.
Total Premium, $ per Cwt.
Base Farm Price + Premiums per Cwt.
Promotion, $ per Cwt.
Hauling, $ per Cwt.
Market fees & coop dues per Cwt.
Total Marketing Expenses per Cwt.
Base + Premiums – Deductions per Cwt.
Futures contract, forward contracting, $ per Cwt.
$12.46
$12.80
$13.03
$13.35
$14.07
0.02
-0.01
0.01
0.22
0.11
0.03
0.08
0.41
0.17
0.12
0.16
0.61
0.25
0.26
0.30
0.81
0.39
0.51
0.77
1.11
$13.04
$13.39
$13.63
$13.97
$14.84
0.13
0.32
0.01
0.15
0.44
0.05
0.15
0.54
0.08
0.15
0.66
0.13
0.24
1.03
0.24
$0.54
$0.69
$0.79
$0.96
$1.34
$12.22
$12.61
$12.81
$13.09
$13.83
0.00
0.00
0.00
0.00
0.11
Total Marketing Income, $ per Cwt.
$0.00
$0.00
$0.00
$0.00
$0.11
Patronage Dividends, $ per Cwt.
$0.00
$0.00
$0.00
$0.02
$0.37
$12.31
$12.69
$12.93
$13.21
$13.95
Net Price Received From All Sources, $ per Cwt.
PPD - Hauling, $ per cwt.
-0.04
0.12
0.21
0.31
0.47
PPD - Hauling + Market Premiums, $ per cwt.
0.07
0.25
0.39
0.62
1.05
Net Marketing Value, $ per cwt. (PPD + Total
Premiums - Total Deductions)
-0.02
0.36
0.63
0.80
1.14
39
Data for each category are calculated independently of all others. Therefore, summation of individual categories will not
equal total categories.
42
Capital and Labor Efficiency Analysis
Capital efficiency factors show how intensively capital is being used in the farm business. Capital efficiency can be
measured as investment per worker and per cow. It can also be measured in terms of the relationship to farm receipts.
Table 41.
CAPITAL EFFICIENCY
Item (Average for Year)
Farm capital
Real estate
Machinery & equipment
Ratios
Asset turnover
0.52
240 New York Dairy Farms, 2006
Per
Per
Worker
Cow
$332,006
$7,762
$3,030
$59,211
$1,384
Operating Expense
0.85
Per Tillable
Acre
$3,724
$664
Interest Expense
0.05
Per Tillable
Acre Owned
$7,346
$2,868
Depreciation Expense
0.08
Average Top 10% Farms:40
Farm capital
$356,377
$7,545
$3,740
Real estate
$3,001
Machinery & equipment
$56,620
$1,199
$594
Ratios
Asset turnover ratio
Operating Expense
Interest Expense
0.54
0.76
0.05
40
Average of 24 farms with highest rates of return to all capital (without appreciation).
$7,311
$2,908
Depreciation Expense
0.06
Asset turnover ratio measures the relationship between capital investment and farm receipts. It is computed by
dividing the year's total farm accrual receipts including appreciation by the average farm assets. The relationship the asset
turnover ratio has to farm profitability and other factors is shown in the following table. As a general rule, dairy farmers
should aim for an asset turnover ratio of 0.6 or higher. The operational ratios reflect the relationship of expense categories to
total farm receipts. The sum of the operating, interest, and depreciation expense ratios expresses total farm expenses per
dollar of total farm receipts.
Table 42.
ASSET TURNOVER AND PROFITABILITY
240 New York Dairy Farms, 2006
Ratio
> .70
.60 to .69
.50 to .59
.40 to .49
.30 to .39
Less than .30
Number
of
Farms
14
26
43
63
62
32
Number
of
Cows
669
804
527
318
137
80
Farm Capital
(average for year)
Per Cow
Per Worker
$5,393
$263,222
6,495
295,642
7,769
341,378
8,524
355,241
10,075
372,826
13,080
382,924
Labor & Management Income Per
Operator
$-12,561
-46,786
-21,422
-35,993
-25,592
-37,434
Net Farm
Income (without
appreciation)
$85,365
52,064
96,186
29,787
20,479
1,362
Measures of labor efficiency are key indicators of the work accomplished by an average worker. The 24 farms with
the highest rates of return on all capital (without appreciation) were above the average of all 240 farms in all measures of
labor efficiency. The top 10 percent averaged 4 more cows per worker and sold eight percent more milk per worker than the
average of all farms.
Table 43.
LABOR EFFICIENCY
240 New York Dairy Farms, 2006
Labor
Average
Farms
Average Top 10% Farms42
41
Efficiency
Total
Per Worker
Total
Per Worker41
Cows, average number
350
43
483
47
Milk sold, pounds
8,086,224
987,530
10,912,943
1,067,194
Tillable acres
730
89
975
95
41
The method used to calculate worker equivalent incorporates the number of hours actually worked by the owner/operators,
instead of using a standard 12 months for each full-time owner/operator of the business. A full-time month is specified to be
230 hours of labor per month.
42
Average of 24 farms with highest rates of return to all capital (without appreciation).
43
The labor force averaged 8.19 full-time worker equivalents per farm (based on 230 hours per month). Twenty-three
percent of the labor was supplied by the farm operator/managers. There were two operators on 131 farms, three on 37 farms,
and 13 farms reported four or more operators.
Labor costs, labor efficiency, and farm profitability are closely related. Farms with high rates of return can attribute
some of their success to the control of labor and machinery costs. Labor and machinery costs average $1,286 per cow and
$5.69 per hundredweight on the 24 farms in the top decile.
Table 44.
LABOR FORCE INVENTORY AND COST ANALYSIS
240 New York Dairy Farms, 2006
Labor Force
Operator number 1
Operator number 2
Operator number 3
Operator number 4
Family paid
Family unpaid
Hired
Total
Average Top 10% Farms:44
Total
Operators'
Months43
Age
Years
of Education
Value of
Labor & Management
13.6
6.4
1.7
0.6
4.2
2.6
69.2
98.3
52
49
45
43
15
15
15
16
$39,503
19,601
5,522
1,877
Total $66,503
÷ 12
=
8.19 Worker Equivalent
1.63 Operator/Manager Equivalent
122.7
÷ 12
=
10.23 Worker Equivalent
1.43 Operator/Manager Equivalent
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average 240 Farms
Per
Total
Cow
Labor Costs
Avg. Top 10% Farms44
Per
Cwt.
Value operators’ labor ($2,300/mo.)
$50,794
$145
$.63
Family unpaid ($2,300/mo.)
5,999
17
.07
Hired
208,284
595
2.58
Total Labor
$265,077
$757
$3.28
Machinery Cost
216,445
618
2.68
Total Labor & Machinery
$481,522
$1,375
$5.96
Hired labor exp. per hired worker equiv.
$34,071
Hired labor exp. as % of milk sales
18.6%
43
See footnote number 41 in Table 43.
44
Average of 24 farms with highest rates of return to all capital (without appreciation).
Per Cow
$92
11
621
$724
562
$1,286
$35,646
19.8%
Per Cwt.
$.41
.05
2.75
$3.21
2.49
$5.70
The relationship of labor efficiency to net farm income is positive over the range in efficiency levels. The higher
outputs of milk sold per worker are partially attributable to higher producing cows. In 2006, increased labor efficiency
generally resulted in larger net farm incomes.
Table 45.
MILK SOLD PER WORKER AND NET FARM INCOME
240 New York Dairy Farm, 2006
Pounds of Milk
Sold Per Worker
Under 400,000
400,000 to 499,999
500,000 to 599,999
600,000 to 699,999
700,000 to 799,999
800,000 to 899,999
900,000 to 999,999
1,000,000 to 1,099,999
1,100,000 & over
No.
of
Farms
26
12
27
34
29
16
27
20
49
No.
of
Cows
52
70
106
146
247
311
433
528
809
Pounds
Milk
Per Cow
15,901
17,032
17,512
19,972
21,842
23,957
23,711
22,980
24,206
Net Farm
Income (without
appreciation)
$9
13,846
7,948
27,353
-12,650
1,621
84,003
101,878
93,855
Labor & Management Income
Per Operator
$-28,733
-11,722
-28,419
-16,124
-52,261
-53,737
-16,479
-6,246
-44,440
44
Farm Business Charts
The Farm Business Chart is a tool which can be used in analyzing a business by drawing a line through the figure in
each column which represents the current level of management performance. The figure at the top of each column is the
average of the top 10 percent of the 240 farms for that factor. The other figures in each column are the average for the
second 10 percent, third 10 percent, etc. Each column of the chart is independent of the others. The farms which are in
the top 10 percent for one factor would not necessarily be the same farms which make up the top 10 percent for any other
factor.
The cost control factors are ranked from low to high, but the lowest cost is not necessarily the most profitable. In
some cases, the "best" management position is somewhere near the middle or average. Many things affect the level of costs,
and must be taken into account when analyzing the factors.
Table 46.
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS
240 New York Dairy Farms, 2006
Worker
Equivalent
Size of Business
No.
Pounds
of
Milk
Cows
Sold
Pounds
Milk Sold
Per Cow
Rates of Production
Tons
Tons Corn
Hay Crop
Silage
DM/Acre
Per Acre
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Worker
Per Worker
28.1
16.3
11.0
7.6
5.2
1,334
709
477
331
214
32,838,030
16,957,054
10,783,772
7,448,566
4,585,983
26,422
24,798
23,910
23,018
22,109
5.7
4.1
3.7
3.4
3.1
26
22
20
19
18
63
51
47
42
39
1,408,635
1,164,573
1,039,317
954,496
826,233
4.0
3.4
2.8
2.1
1.5
146
110
81
60
40
2,847,092
2,130,985
1,531,301
1,068,877
670,582
20,965
19,752
18,425
16,623
12,981
2.7
2.4
2.2
1.9
1.3
17
16
14
12
9
36
33
30
26
20
731,278
650,759
585,305
478,008
321,457
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$405
622
706
782
842
17%
23
26
27
29
$340
464
530
573
621
$951
1,148
1,255
1,336
1,396
$570
800
884
988
1,061
$3.30
4.11
4.48
4.76
4.99
892
945
1,006
1,057
1,221
30
31
33
36
42
658
702
760
855
1,139
1,462
1,544
1,679
1,849
2,320
1,125
1,174
1,255
1,325
1,501
5.17
5.36
5.70
6.24
7.37
45
The profitability section shows the variation in farm income by decile and enables a dairy farmer to determine where
he or she ranks by using several measures of farm profitability. Remember that each column is independently established
and the farms making up the top decile in the first column will not necessarily be on the top of any other column. The dairy
farmer who ranks at or near the top of most of these columns is in a very enviable position.
Farm Business Charts for farms with freestall barns and 150 cows or less, 150 to 300 cows, and more than 300
cows, and farms with conventional barns with 60 cows or less and more than 60 cows are discussed in the supplemental
section on pages 66-70.
Table 46. (continued)
FARM BUSINESS CHART FOR
FARM MANAGEMENT COOPERATORS
240 New York Dairy Farms, 2006
Milk
Receipts
Per Cow
Milk
Receipts
Per Cwt.
Operating Cost
Milk Production
Per Cow
$3,700
3,413
3,274
3,163
3,061
$15.39
14.56
14.26
14.00
13.83
$1,328
1,738
2,026
2,231
2,369
2,909
2,720
2,565
2,338
1,808
13.68
13.54
13.40
13.24
12.88
2,564
2,707
2,901
3,131
3,465
Total
Net Farm Income
Without Appreciation
Per
Operations
Cow
Ratio
Operating Cost
Milk Production
Per Cwt.
Total Cost Milk
Production
Per Cow
Total Cost Milk
Production
Per Cwt.
$8.24
9.69
10.30
10.74
11.27
$2,373
2,865
3,118
3,306
3,444
$12.93
14.08
14.66
15.28
15.83
11.93
12.44
12.94
13.62
15.95
3,546
3,712
3,839
4,062
4,500
16.43
17.35
18.55
20.16
24.96
Profitability
Net Farm Income
With Appreciation
Per
Total
Cow
Labor &
Management Income
Per
Per
Farm
Operator
$322,100
140,266
85,016
51,109
32,171
$811
557
444
344
214
0.23
0.16
0.12
0.10
0.06
$580,521
251,067
162,504
103,202
69,484
$1,156
777
628
523
416
$152,400
43,564
12,316
-3,736
-18,707
$103,004
25,997
7,456
-2,485
-13,358
18,126
4,697
-16,215
-41,972
-183,853
125
34
-80
-194
-653
0.03
0.01
-0.02
-0.06
-0.25
45,567
29,036
15,548
-5,920
-76,486
309
228
100
-40
-442
-37,164
-62,910
-88,972
-137,571
-368,899
-26,146
-45,584
-65,273
-96,575
-215,708
46
Financial Analysis and Management
Analysis and astute management of farm financial affairs must receive high priority if the farm business is to be
successful and if the farm family is to achieve a reasonable living standard.
The farm finance checklist and the financial analysis chart are provided to serve as guidelines. Dairy farmers can
determine how their financial management measures up by comparing with average data from other farms.
Table 47.
A FARM FINANCE CHECKLIST
240 New York Dairy Farms, 2006
Average 240 Farms
Average Top
10% Farms45
How farm assets are being used (average for the year):
Total assets (capital) per cow
Farm assets in livestock
Farm assets in farm real estate
Farm assets in machinery
$7,762
27%
39%
18%
$7,545
28%
40%
16%
Measures of debt capacity & debt structure:
Equity in the business
Farm debt per cow
Long term debt/asset ratio46
Intermediate & current term debt/asset ratio46
Intermediate & current term debt as % of total
62%
$2,927
0.36
0.39
63%
61%
$2,984
0.42
0.38
58%
0.94
0.85
$494
15%
1.34
1.69
$673
21%
Debt repayment ability:47
Cash flow coverage ratio
Debt coverage ratio
Debt payments made per cow
Debt payments made as % of milk receipts
Indicators of annual financial progress:
Annual change in farm assets
Annual change in farm debt
Annual change in farm net worth
Amount
+$147,879
+$120,720
+$27,158
Percent
+5.6%
+12.9%
+1.6%
Amount
+$333,934
+$140,638
+$193,296
Percent
+9.6%
+10.3%
+9.1%
45
Twenty-four farms with highest rates of return on all capital (without appreciation).
Long or intermediate and current term debt divided by long or intermediate and current term assets.
47
Average of 191 farms that participated in DFBS both in 2005 and 2006. Twenty-one of the 24 top 10 percent farms that
participated both years.
46
The most profitable farms carried $57 more debt per cow, the average equity in their businesses was one percent
lower than that of the average of all 240 farms, and they had a greater ability to make 2006 debt payments. Because, with
higher income they were able to pay down debt, it does not mean that lower debt farms are more profitable.
Average farm debt grew 7.3 percentage points faster than assets during 2006 on the 240 dairy farms. Average farm
net worth increased 1.6 percent.
47
The farm financial analysis chart is designed just like the farm business chart on pages 44-45 and may be used to
measure the financial health of the farm business. Most of the financial measures are defined on pages 16, 18, 22, and 42 in
this publication.
Table 48.
FINANCIAL ANALYSIS CHART
240 New York Dairy Farms, 2006
Planned
Debt
Payments
Per Cow
$70
207
309
372
414
Available
for
Debt Service
Per Cow
$916
677
570
518
451
Cash Flow
Coverage
Ratio
6.08
1.62
1.29
1.04
0.85
465
536
605
689
872
371
290
186
90
-323
0.75
0.64
0.50
0.25
-1.12
Liquidity/Repayment
Debt
Payments
Debt
as Percent
Coverage
of Milk
Ratio
Sales
5.75
2%
1.69
7
1.31
10
1.09
12
0.92
14
0.71
0.50
0.34
0.01
-1.67
16
18
21
24
34
Debt Per
Cow
$355
1,144
1,735
2,217
2,531
Working
Capital as
% of Total
Expenses
44%
29
22
17
14
2,867
3,221
3,581
4,197
5,299
10
7
2
-4
-18
Solvency
Leverage
Ratio48
0.03
0.16
0.23
0.33
0.45
0.57
0.65
0.85
1.14
2.38
Asset
Turnover
(ratio)
Percent
Equity
97%
87
82
76
69
Debt/Asset Ratio
Current &
Intermediate
0.03
0.11
0.17
0.25
0.29
64
61
54
47
34
Efficiency (Capital)
Real Estate
Machinery
Investment
Investment
Per Cow
Per Cow
0.33
0.39
0.48
0.56
0.79
Total Farm
Assets
Per Cow
Long
Term
0.00
0.00
0.02
0.13
0.22
0.31
0.42
0.56
0.68
0.89
Operating
Expense
Ratio
0.65
0.72
0.76
0.79
0.81
0.83
0.85
0.88
0.92
1.09
Change in
Net Worth
With Appreciation
Current
Ratio
21.29
4.45
2.97
2.24
1.86
1.62
1.36
1.08
0.80
0.42
Operational Ratios
Interest
Depreciation
Expense
Expense
Ratio
Ratio
0.00
0.02
0.02
0.05
0.03
0.05
0.04
0.06
0.04
0.07
0.05
0.08
0.06
0.09
0.07
0.10
0.07
0.12
0.11
0.17
Profitability
Percent Rate of Return with
Appreciation on:
Equity
Investment49
0.73
$1,452
$596
$5,471
$370,169
16%
12%
0.60
2,183
872
6,557
125,206
9
8
0.54
2,529
1,087
7,001
70,554
5
5
0.50
2,859
1,305
7,418
35,165
3
4
0.46
3,176
1,508
7,851
14,111
1
3
----------------------------------------------------------------------------------- -----------------------------------------------------------------0.43
3,572
1,681
8,564
3,977
-1
2
0.38
4,041
1,899
9,460
-7,539
-2
0
0.35
4,658
2,211
10,346
-23,182
-5
-2
0.30
5,572
2,670
11,680
-62,442
-10
-4
0.21
8,469
3,845
15,097
-254,438
-27
-11
48
Dollars of debt per dollar of equity, computed by dividing total liabilities by total equity.
49
Return on all farm capital (no deduction for interest paid) divided by total farm assets.
48
Herd Size Comparisons
The 240 New York dairy farms have been sorted into eight herd size categories and averages for the farms in each
category are presented in Tables 49 through 53. Note that after the less than 50 cow category, the herd size categories
increase by 25 cows up to 100 cows, by 100 cows up to 400 cows, and by 200 cows up to 600 cows.
As herd size increases, the net farm income generally increases (Table 49). Net farm income without appreciation
averaged $5,133 per farm for the less than 50 cow farms and $71,561 per farm for those with more than 600 cows. Return to
all capital without appreciation also generally increased as herd size increased.
It is more than size of herd that determines profitability on dairy farms. Farms with 600 and more cows averaged
$70 net farm income per cow while the less than 50 cow dairy farms averaged $129 net farm income per cow. The 200 to
299 herd size category had the highest net farm income per cow at $323, while the 50 to 74 herd size category had the
second highest net farm income per cow at $205. Other factors that affect profitability and their relationship to the size
classifications are shown in Table 50.
Table 49.
COWS PER FARM AND FARM FAMILY INCOME MEASURES
240 New York Dairy Farms, 2006
Number of
Cows
Under 50
50 to 74
75 to 99
100 to 199
200 to 299
300 to 399
400 to 599
600 & over
Number
of
Farms
23
29
27
50
19
20
24
48
Average
Number
of
Cows
40
62
86
141
247
339
477
1,021
Net Farm
Income
Without
Appreciation
$5,133
12,631
13,607
20,870
79,907
60,684
75,522
71,561
Net Farm
Income
Per Cow
$129
205
158
147
323
179
158
70
Labor &
Management
Income Per
Operator
$-19,389
-13,164
-19,366
-23,030
7,001
-19,018
-21,663
-76,089
Return to
All Capital
Without
Appreciation
-5.2%
-4.3%
-3.7%
-1.0%
2.6%
1.8%
1.8%
1.9%
This year, net farm income per cow did not exhibit the usual increase as herd size increased. Most herd size
categories saw a decrease in operating cost of producing milk from a year earlier (Table 50). Net farm income per cow will
increase as farms become larger if the costs of increased purchased inputs are offset by greater and more efficient output.
The farms with more than 600 cows averaged more milk sold per cow than any other size category (Table 50).
With 24,152 pounds of milk sold per cow, farms in the largest herd size group averaged 18 percent more milk output per
cow than the average of all herds in the summary with less than 600 cows.
Many dairy farmers who have been willing and able to employ and manage the labor required to milk 3 times per
day have been successful. Only three percent of the 79 DFBS farms with less than 100 cows used a milking frequency
greater than 2 times per day. As herd size increased, the percent of herds using a higher milking frequency increased. Farms
with 100 to 200 cows reported 8 percent of the herds milking more often than 2 times per day, the 200-299 cow herds
reported 42 percent, 300-399 cow herds reported 70 percent, 400-599 cow herds reported 67 percent, and the 600 cow and
larger herds reported 81 percent exceeding the 2 times per day milking frequency.
49
Table 50.
COWS PER FARM AND RELATED FARM FACTORS
240 New York Dairy Farms, 2006
Number
of Cows
Under 50
50 to 74
75 to 99
100 to 199
200 to 299
300 to 399
400 to 599
600 & over
Average
Number
of
Cows
40
62
86
141
247
339
477
1,021
Milk
Sold
Per Cow
(lbs.)
Milk
Sold Per
Worker
(cwt.)
Tillable
Acres
Per Cow
Forage
DM Per
Cow
(tons)
18,070
18,326
18,936
19,818
21,454
23,538
22,913
24,152
3,948
4,825
5,679
7,334
9,491
9,262
9,768
11,393
3.9
3.5
3.0
2.8
2.3
2.3
2.3
1.8
6.6
7.6
8.6
8.7
7.2
9.4
8.4
7.7
Farm
Capital
Per
Cow
$12,192
9,588
9,302
9,575
7,712
8,305
7,593
7,246
Cost of
Producing
Milk Per Cwt.
Operating
Total
$11.27
11.23
11.38
11.66
11.07
12.08
11.80
12.33
$20.66
18.78
18.10
17.02
14.73
15.37
15.05
14.92
Bovine somatotropin (bST), was used to a greater extent on the large herd farms. bST was used consistently during
2006 on 11 percent of the herds with less than 100 cows, 32 percent of the farms with 100 to 299 cows and on 67 percent of
the farms with 300 cows and more.
Milk output per worker has always shown a strong correlation with net farm income. The farms with 100 cows or
more averaged over 944,900 pounds of milk sold per worker while the farms with less than 100 cows averaged less than
481,800 pounds per worker.
In achieving the highest productivity per cow and per worker, the largest farms had the fewest crop acres per cow
and below average forage dry matter harvested per cow. However, the larger farms generally purchased more roughage per
cow. The largest farms had the most efficient use of farm capital with an average investment of $7,246 per cow.
The 19 farms with 200-299 cows had the lowest total cost of producing milk at $14.73 per hundredweight. The 48
farms with more than 600 cows held their average total costs of producing milk to $14.92 per hundredweight, $2.18 below
the $17.10 average for the remaining 192 dairy farms. The lower average costs of production plus a similar milk price gave
the managers of the largest dairy farms profit margins (milk price less total cost of producing milk) that averaged $2.22 per
hundredweight above the average of the other 192 DFBS farms. However, all herd size categories averaged a negative profit
margin in 2006.
Tables 51 through 53 show progress of the farm businesses that have participated in DFBS in each of the last five
years for three herd size groups.
A detailed list of accrual expenses, receipts and a profitability analysis is presented in Table 54, on pages 53 and 54
for the eight herd size categories. Purchased feed is the largest expense on all farms, regardless of size. However, larger
farms find hired labor expense as the second largest expense category.
Assets, liabilities and financial measures are presented in Table 55 on pages 55-58. All herd size categories saw an
increase in net worth during 2005. The largest herd size category experienced an increase in net worth of nearly $716,000.
However, percent equity went down as assets increased. The largest herds had the lowest percent equity; while the smaller
herds averaged 78 percent.
Selected business factors by herd size group are presented in Table 56 on pages 59 and 60. George Warren, father
of farm business management at Cornell, said in his 1918 farm management text that larger farms are, on average, more
profitable; but no farm is large enough to guarantee a profit. For a more detailed analysis of large herd farms, see Dairy
Farm Business Summary, New York Large Herd Farms, 300 Cows or Larger, 2006. For analysis of smaller herds, see Dairy
Farm Business Summary, New York Small Herd Farms, 80 Cows or Fewer, 2006. Both publications are available from
Linda Putnam, Department of Applied Economics and Management, Cornell University, 305 Warren Hall, Ithaca, New York
14853-7801; phone 607-255-8429; e-mail ldp2@cornell.edu. Visit the Department of Applied Economics and Management
website http://aem.cornell.edu for a list of all department publications and a publication order form.
50
Table 51.
PROGRESS OF FARM BUSINESSES WITH LESS THAN 100 COWS
Same 38 New York Dairy Farms, 2002 - 2006
Selected Factors
2002
2003
2004
2005
2006
Milk receipts per cwt. milk
$12.83
$13.11
$16.81
$15.82
$13.83
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
63
46
11,440
2.43
191
63
48
11,343
2.32
193
62
48
11,090
2.27
197
62
51
11,589
2.36
194
62
53
11,404
2.31
193
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
18,252
3.6
13
18,056
2.1
15
17,963
2.3
16
18,614
2.2
16
18,285
2.3
14
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
26
471,269
27
489,626
27
487,669
26
491,410
27
493,682
Cost Control
Grain & concen. purchased as % of milk sales
Dairy feed & crop expense per cwt. milk
Operating cost of producing cwt. milk
Total cost of producing cwt. milk
Hired labor cost per cwt.
Interest paid per cwt.
Labor & machinery costs per cow
Replacement livestock expense
Expansion livestock expense
30%
$5.13
$9.65
$16.13
$0.76
$0.57
$1,461
$2,630
$406
33%
$5.33
$10.22
$16.77
$0.76
$0.53
$1,502
$2,187
$544
29%
$5.96
$12.28
$19.18
$0.79
$0.56
$1,594
$2,802
$966
28%
$5.72
$11.52
$18.23
$0.89
$0.65
$1,600
$2,316
$1,459
33%
$5.87
$11.71
$18.80
$0.78
$0.80
$1,628
$1,760
$847
Capital Efficiency
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
$8,231
$1,818
$3,603
$1,804
0.36
$8,501
$1,830
$3,850
$1, 796
0.37
$9,028
$1,925
$4,129
$1,856
0.41
$9,412
$2,025
$4,231
$2,005
0.41
$9,830
$2,122
$4,433
$2,145
0.34
$22,066
$25,510
$20,340
$31,845
$35,679
$48,928
$35,167
$54,191
$10,107
$19,364
$-7,364
$-11,145
$3,203
$1,387
$-22,484
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per
operator/manager
Rate return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
Financial Summary, End Year
Farm net worth
Change in net worth with appreciation
Debt to asset ratio
Farm debt per cow
-3.7%
-1.6%
-2.2%
$394,899
$4,861
0.24
$1,966
-2.5%
-0.7%
-2.9%
$406,930
$11,081
0.25
$2,185
1.9%
2.6%
0.2%
$435,029
$28,937
0.24
$2,156
3.0%
3.6%
0.4%
$463,105
$30,528
0.23
$2,192
-5.1%
-2.4%
-3.9%
$464,447
$-1,111
0.24
$2,403
51
Table 52.
PROGRESS OF FARM BUSINESSES WITH 100-499 COWS
Same 55 New York Dairy Farms, 2002 - 2006
Selected Factors
2002
2003
2004
2005
2006
Milk receipts per cwt. milk
$12.93
$13.29
$16.88
$16.12
$13.94
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
245
182
53,160
6.21
580
250
192
53,210
6.35
587
256
195
54,183
6.66
599
263
208
57,101
6.71
630
271
221
58,943
6.79
647
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
21,714
3.0
15
21,322
3.4
17
21,203
3.4
18
21,735
3.1
19
21,722
3.2
18
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
39
856,497
39
837,737
38
814,176
39
850,561
40
868,291
Cost Control
Grain & concen. purchased as % of milk sales
Dairy feed & crop expense per cwt. milk
Operating cost of producing cwt. milk
Total cost of producing cwt. milk
Hired labor cost per cwt.
Interest paid per cwt.
Labor & machinery costs per cow
Replacement livestock expense
Expansion livestock expense
30%
$4.82
$10.70
$14.34
$2.23
$0.56
$1,259
$8,543
$8,697
31%
$4.99
$11.28
$14.85
$2.28
$0.53
$1,260
$8,292
$1,592
28%
$5.59
$12.50
$16.25
$2.48
$0.55
$1,364
$7,662
$8,409
25%
$5.12
$12.03
$15.93
$2.44
$0.65
$1,407
$9,554
$4,449
Capital Efficiency
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
$6,922
$1,452
$2,662
$1,765
0.51
$7,046
$1,459
$2,752
$1,806
0.50
$7,434
$1,523
$2,927
$1,869
0.59
$8,001
$1,615
$3,209
$1,980
0.55
$8,266
$1,644
$3,365
$2,067
0.47
$40,783
$81,370
$34,636
$82,759
$156,853
$235,234
$144,624
$227,320
$32,850
$88,909
$-8,988
$-15,240
$61,726
$43,381
$-27,498
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per
operator/manager
Rate return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
Financial Summary, End Year
Farm net worth
Change in net worth with appreciation
Debt to asset ratio
Farm debt per cow
1.8%
2.9%
0.5%
$1,100,439
$22,323
0.36
$2,466
1.9%
2.8%
0.1%
$1,135,518
$35,751
0.37
$2,646
14.2%
10.7%
6.6%
$1,317,102
$175,625
0.34
$2,572
11.6%
9.6%
5.7%
$1,485,023
$141,744
0.32
$2,645
29%
$4.99
$12.03
$15.80
$2.48
$0.81
$1,389
$6,731
$14,143
1.5%
3.1%
0.6%
$1,514,942
$8,333
0.34
$2,777
52
Table 53.
PROGRESS OF FARM BUSINESSES WITH MORE THAN 500 COWS
Same 40 New York Dairy Farms, 2002 - 2006
Selected Factors
2002
2003
2004
2005
2006
Milk receipts per cwt. milk
$13.05
$13.31
$16.62
$16.05
$13.88
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
745
576
176,262
16.28
1,407
809
614
190,334
17.77
1,499
868
659
201,703
19.01
1,604
910
713
219,391
19.77
1,654
961
761
231,480
20.66
1,723
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
23,670
3.6
15
23,534
3.5
17
23,246
3.6
18
24,108
3.6
19
24,092
3.6
19
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
46
1,082,580
46
1,070,849
46
1,061,313
46
1,109,997
47
1,120,562
Cost Control
Grain & concen. purchased as % of milk sales
Dairy feed & crop expense per cwt. milk
Operating cost of producing cwt. milk
Total cost of producing cwt. milk
Hired labor cost per cwt.
Interest paid per cwt.
Labor & machinery costs per cow
Replacement livestock expense
Expansion livestock expense
Capital Efficiency
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per
operator/manager
Rate return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
Financial Summary, End Year
Farm net worth
Change in net worth with appreciation
Debt to asset ratio
Farm debt per cow
29%
$4.75
$11.15
$13.85
$2.74
$0.59
$1,232
$17,699
$50,958
30%
$5.04
$11.57
$14.10
$2.78
$0.55
$1,219
$27,413
$80,093
27%
$5.59
$12.37
$15.00
$2.90
$0.55
$1,286
$33,859
$75,197
26%
$5.13
$12.22
$14.97
$2.79
$0.63
$1,331
$30,332
$43,816
29%
$5.02
$12.16
$14.86
$2.78
$0.78
$1,335
$15,900
$56,831
$6,493
$1,123
$2,401
$1,811
0.59
$6,388
$1,068
$2,428
$1,801
0.60
$6,575
$1,080
$2,442
$1,872
0.72
$7,030
$1,167
$2,515
$2,031
0.68
$7,275
$1,220
$2,632
$2,126
0.58
$90,225
$212,748
$90,527
$236,290
$590,001
$828,190
$539,468
$852,260
$98,291
$323,973
$-20,587
$-22,039
$215,155
$168,354
$-51,528
4.1%
4.4%
1.9%
$2,639,048
$-9,253
0.47
$3,006
5.0%
4.6%
1.8%
$2,751,305
$103,974
0.49
$3,200
23.5%
14.5%
10.4%
$3,378,288
$642,739
0.44
$2,979
19.9%
13.6%
8.8%
$4,025,143
$639,239
0.40
$2,914
5.0%
5.5%
2.3%
$4,134,268
$83,546
0.43
$3,095
53
Table 54.
FARM BUSINESS SUMMARY BY HERD SIZE
Item
Number of farms
Farm Size:
240 New York Dairy Farms, 2006
Less than
50 to
50 Cows
74 Cows
23
29
75 to
99 Cows
27
100 to
199 Cows
50
ACCRUAL EXPENSES
Hired labor
Dairy grain & concentrate
Dairy roughage
Nondairy feed
Professional nutritional services
Machine hire, rent & lease
Machine repairs & farm vehicle expense
Fuel, oil & grease
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Land, building & fence repair
Taxes & rent
Utilities
Interest paid
Other professional fees
Misc. (including insurance)
Total Operating Expenses
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
Total Accrual Expenses
$3,892
30,478
3,115
58
0
1,928
8,125
5,865
1,195
2,604
3,496
8,577
1,365
3,575
0
56
614
736
1,643
1,933
1,116
910
9
1,623
5,728
5,234
6,675
541
3,687
$104,778
3,324
468
8,792
3,518
$120,880
$8,741
45,694
5,025
25
0
2,803
11,442
8,407
1,936
2,567
5,387
10,996
2,235
5,124
0
1,398
754
768
1,939
4,187
2,431
2,102
76
3,147
7,590
7,261
10,560
597
5,991
$159,184
1,461
808
9,441
5,062
$175,957
$23,512
68,099
4,121
132
700
5,620
18,003
11,788
620
4,402
8,384
16,776
1,903
8,228
243
2,778
1,250
981
2,981
7,665
4,822
2,414
96
4,129
9,146
9,568
12,287
1,268
6,719
$238,637
1,193
105
17,123
6,684
$263,741
$52,313
116,155
2,331
25
1,121
9,482
26,279
21,507
1,128
6,861
15,057
25,393
5,261
11,172
18
4,381
3,199
1,520
4,349
11,218
8,497
5,999
365
5,107
17,761
15,015
21,987
1,284
11,392
$406,178
1,442
1,829
27,696
13,287
$450,433
$98,947
11,134
3,088
1,288
-1,368
12,923
$126,013
$155,035
12,036
4,762
1,336
546
14,873
$188,588
$222,746
21,184
3,842
692
7,528
21,357
$277,348
$391,657
28,528
9,658
321
4,484
36,655
$471,303
$5,133
$9,399
$-21,521
1.11
$-19,389
-8.6%
-7.5%
-5.2%
-4.3%
$12,631
$28,344
$-18,034
1.37
$-13,164
-8.4%
-4.8%
-4.3%
-1.7%
$13,607
$33,442
$-26,532
1.37
$-19,366
-7.0%
-3.7%
-3.7%
-1.3%
$20,870
$50,783
$-36,388
1.58
$-23,030
-3.5%
-0.6%
-1.0%
1.2%
ACCRUAL RECEIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Miscellaneous receipts
Total Accrual Receipts
PROFITABILITY ANALYSIS
Net farm income (without appreciation)
Net farm income (with appreciation)
Labor & management income
Number of operators
Labor & management income/operator
Rates of return on: Equity capital w/o apprec.
Equity capital with appreciation
All capital without appreciation
All capital with appreciation
54
Table 54. (continued)
FARM BUSINESS SUMMARY BY HERD SIZE
Item
Number of farms
240 New York Dairy Farms, 2006
200 to
300 to
Farm Size:
299 Cows
399 Cows
19
20
400 to
599 Cows
24
600 or
More Cows
48
ACCRUAL EXPENSES
Hired labor
Dairy grain & concentrate
Dairy roughage
Nondairy feed
Professional nutritional services
Machine hire, rent & lease
Machine repairs & farm vehicle expense
Fuel, oil & grease
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional services
Other livestock expense
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Land, building & fence repair
Taxes & rent
Utilities
Interest paid
Other professional fees
Misc. (including insurance)
Total Operating Expenses
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
Total Accrual Expenses
$106,325
205,529
19,517
839
976
27,519
42,389
34,766
7,289
10,546
30,844
41,869
12,025
15,660
1,053
20,347
6,518
3,498
4,632
19,078
12,236
6,771
1,069
12,095
25,927
23,891
41,869
4,928
13,896
$753,901
10,979
329
36,092
24,100
$825,401
$219,501
324,803
15,975
0
33
24,365
59,664
53,357
10,029
18,771
49,606
70,850
24,565
27,105
547
4,723
16,013
4,130
4,800
20,062
21,566
12,987
2,364
14,198
39,186
33,407
65,748
4,041
22,310
$1,164,707
27,325
766
54,301
41,312
$1,288,411
$263,410
424,868
18,256
141
413
41,200
86,358
64,752
531
22,869
69,373
86,406
31,053
38,633
1,480
37,875
16,321
5,274
7,572
44,628
30,240
16,981
3,158
27,421
50,276
46,919
83,882
11,081
27,084
$1,558,454
9,101
0
85,298
57,430
$1,710,283
$701,308
993,563
77,740
18
485
61,567
171,342
128,363
16,693
56,108
170,596
186,727
81,691
85,166
4,725
81,632
60,256
11,582
15,692
65,819
51,571
41,517
4,882
55,966
109,063
89,846
188,594
21,844
63,768
$3,598,123
54,841
278
176,127
127,133
$3,956,502
$728,171
80,166
13,600
5,372
22,605
55,393
$905,308
$1,121,545
103,173
25,488
2,239
24,040
72,611
$1,349,095
$1,507,437
108,614
28,198
15,369
37,081
89,108
$1,785,806
$3,416,994
274,267
70,511
1,929
95,211
169,149
$4,028,062
$79,907
$123,663
$11,412
1.63
$7,001
0.7%
4.2%
2.6%
4.9%
$60,684
$123,848
$-32,520
1.71
$-19,018
-0.8%
2.7%
1.8%
4.1%
$75,522
$180,750
$-46,793
2.16
$-21,663
-0.8%
3.7%
1.8%
4.7%
$71,561
$302,996
$-148,374
1.95
$-76,089
-1.1%
4.2%
1.9%
5.0%
ACCRUAL RECEIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Misc. receipts
Total Accrual Receipts
PROFITABILITY ANALYSIS
Net farm income (without appreciation)
Net farm income (with appreciation)
Labor & management income
Number of operators
Labor & management income/operator
Rates of return on: Equity capital w/o apprec.
Equity capital with appreciation
All capital without appreciation
All capital with appreciation
55
Table 55.
Item
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
Less than 50 Cows
50 to 74 Cows
Jan. 1
Dec. 31
Jan. 1
Dec. 31
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock50
Machinery & equipment50
Farm Credit stock
Other stock & certificates
Land & buildings50
Total Farm Assets
$4,417
7,930
215
22,487
94,648
87,000
357
885
264,131
$482,071
$3,076
8,097
151
21,554
97,565
88,017
263
914
268,316
$487,955
$6,611
14,703
56
40,377
131,919
126,064
547
5,142
256,275
$581,695
$3,294
13,324
16
38,497
137,148
130,171
492
5,569
274,151
$602,661
Personal cash, checking & savings
Cash value of life insurance
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Nonfarm Assets51
Farm & Nonfarm Assets
$9,105
7,631
18,000
8,633
20,705
13,633
719
$78,427
$560,498
$11,531
8,374
21,667
7,433
22,464
13,633
560
$85,663
$573,618
$8,170
10,956
16,781
10,937
22,287
10,550
3,181
$82,863
$664,558
$5,966
11,642
17,406
10,633
28,817
10,563
3,763
$88,789
$691,450
$5,140
3,070
70
0
$2,536
3,453
17
0
$7,096
4,343
1,465
0
$10,829
5,998
1,811
0
6,404
4,460
41,736
52,910
$113,790
4,146
$117,936
$368,281
$442,562
8,252
4,822
44,993
59,394
$123,467
1,566
$125,033
$364,488
$448,585
11,611
2,761
51,147
77,004
$155,427
1,396
$156,823
$426,268
$507,735
13,346
3,353
46,694
89,856
$171,888
1,662
$173,550
$430,773
$517,900
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced government receipt
Current Portion:
Intermediate
Long Term
Intermediate52
Long term50
Total Farm Liabilities
Nonfarm Liabilities51
Farm & Nonfarm Liabilities
Farm Net Worth (Equity Capital)
Farm & Nonfarm Net Worth
FINANCIAL MEASURES
Percent Equity
Debt/asset ratio-long term
Debt/asset ratio-intermediate & current
Change in net worth with appreciation
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount available for debt service
Cash flow coverage ratio for 2006
Debt coverage ratio for 2006
50
Less than 50 Cows
75%
0.22
0.29
$-3,793
$3,018
$542
21%
$7,492
0.44
0.47
Includes discounted lease payments.
Average of farms reporting nonfarm assets and liabilities for 2006.
52
Includes Farm Credit stock & discounted lease payments for cattle & machinery.
51
50 to 74 Cows
71%
0.33
0.25
$4,505
$2,734
$570
22%
$20,192
0.74
0.43
56
Table 55. (cont'd)
Item
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
75 to 99 Cows
Jan. 1
Dec. 31
100 to 199 Cows
Jan. 1
Dec. 31
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock53
Machinery & equipment53
Farm Credit stock
Other stock & certificates
Land & buildings53
Total Farm Assets
$11,849
19,591
834
58,724
185,181
179,837
1,046
11,869
318,390
$787,321
$9,202
18,605
760
59,887
196,220
183,318
1,095
14,139
329,486
$812,712
$13,217
37,373
1,538
93,382
299,700
291,220
1,427
15,822
590,666
$1,344,342
$10,926
34,767
534
88,889
313,544
295,505
1,068
18,180
610,481
$1,373,894
Personal cash, checking & savings
Cash value of life insurance
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Nonfarm Assets54
Farm & Nonfarm Assets
$1,663
16,823
22,380
8,080
40,228
7,587
9,003
$105,763
$893,084
$1,607
18,300
28,564
6,470
47,062
7,233
10,109
$119,346
$932,058
$18,416
10,061
73,705
11,011
49,910
7,273
4,767
$175,143
$1,519,485
$17,144
15,253
75,136
11,004
60,571
7,591
11,366
$198,065
$1,571,959
$7,081
10,301
656
0
$15,168
11,337
247
0
$9,798
14,918
764
0
$13,890
19,435
1,106
0
8,930
4,979
80,042
80,185
$192,175
279
$192,454
$595,146
$700,630
11,879
5,161
72,951
89,262
$206,005
6,981
$212,986
$606,707
$719,072
27,391
8,597
138,035
126,995
$326,499
2,401
$328,900
$1,017,844
$1,190,585
30,467
10,273
137,803
124,149
$337,122
2,092
$339,214
$1,036,772
$1,232,745
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced government receipt
Current Portion:
Intermediate
Long Term
Intermediate55
Long term53
Total Farm Liabilities
Nonfarm Liabilities54
Farm & Nonfarm Liabilities
Farm Net Worth (Equity Capital)
Farm & Nonfarm Net Worth
FINANCIAL MEASURES
Percent equity
Debt/asset ratio-long term
Debt/asset ratio-intermediate & current
Change in net worth with appreciation
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount available for debt service
Cash flow coverage ratio for 2006
Debt coverage ratio for 2006
53
75 to 99 Cows
75%
0.25
0.26
$11,560
$2,357
$533
21%
$28,617
0.85
0.64
Includes discounted lease payments.
Average of farms reporting nonfarm assets and liabilities for 2006.
55
Includes Farm Credit stock & discounted lease payments for cattle & machinery.
54
100 to 149 Cows
75%
0.20
0.28
$18,928
$2,369
$492
18%
$51,491
0.86
0.69
57
Table 55. (cont’d)
Item
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
200 to 299 Cows
Jan. 1
Dec. 31
300 to 399 Cows
Jan. 1
Dec. 31
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock56
Machinery & equipment56
Farm Credit stock
Other stock & certificates
Land & buildings56
Total Farm Assets
$9,208
63,232
284
160,089
497,153
325,507
5,127
27,370
770,578
$1,858,548
$7,559
55,853
433
174,091
537,221
341,087
1,474
31,184
809,315
$1,958,216
$16,480
97,807
4,709
270,985
702,173
517,850
2,762
29,729
1,085,505
$2,728,000
$31,505
95,935
2,262
264,597
754,722
535,737
2,458
32,633
1,184,860
$2,904,709
Personal cash, checking & savings
Cash value of life insurance
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Nonfarm Assets57
Farm & Nonfarm Assets
$5,967
12,027
29,778
8,444
28,571
6,111
366,629
$457,527
$2,316,075
$6,944
11,068
29,778
9,222
38,652
6,667
371,800
$474,131
$2,432,347
$1,943
33,483
39,333
20,248
49,635
4,125
4,316
$153,084
$2,881,084
$2,242
34,157
41,000
20,590
59,970
4,125
5,101
$167,186
$3,071,895
$38,540
23,124
5,131
0
$55,490
34,645
8,220
0
$22,976
65,079
3,228
0
$38,849
86,832
19,624
0
27,170
10,701
201,199
348,306
$654,170
725
$654,895
$1,204,377
$1,661,180
45,584
14,306
212,761
317,603
$688,610
717
$689,327
$1,269,607
$1,743,020
78,154
22,107
449,990
276,190
$917,724
4,771
$922,495
$1,810,276
$1,958,589
79,362
21,535
490,411
344,063
$1,080,676
4,636
$1,085,312
$1,824,033
$1,986,583
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced government receipt
Current Portion:
Intermediate
Long Term
Intermediate58
Long term56
Total Farm Liabilities
Nonfarm Liabilities57
Farm & Nonfarm Liabilities
Farm Net Worth (Equity Capital)
Farm & Nonfarm Net Worth
FINANCIAL MEASURES
Percent equity
Debt/asset ratio-long term
Debt/asset ratio-intermediate & current
Change in net worth with appreciation
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount available for debt service
Cash flow coverage ratio for 2006
Debt coverage ratio for 2006
56
200 to 299 Cows
65%
0.39
0.32
$65,230
$2,682
$403
14%
$92,170
0.90
0.99
Includes discounted lease payments.
Average of farms reporting nonfarm assets and liabilities for 2006.
58
Includes Farm Credit stock & discounted lease payments for cattle & machinery.
57
300 to 399 Cows
63%
0.29
0.43
$13,757
$2,997
$465
14%
$148,360
0.88
0.83
58
Table 55. (cont'd)
Item
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
400 to 599 Cows
More than 600 Cows
Jan. 1
Dec. 31
Jan. 1
Dec. 31
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock59
Machinery & equipment59
Farm Credit stock
Other stock & certificates
Land & buildings59
Total Farm Assets
$20,544
114,860
4,038
360,520
972,916
638,836
5,345
72,007
1,315,140
$3,504,206
$31,250
117,976
407
325,992
1,034,548
680,708
3,474
77,294
1,463,030
$3,734,680
$53,536
246,132
10,762
783,424
2,087,041
1,166,175
23,215
197,695
2,608,251
$7,176,231
$44,722
230,364
7,826
757,349
2,239,685
1,266,482
12,852
212,576
2,854,903
$7,626,760
Personal cash, checking & savings
Cash value of life insurance
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Nonfarm Assets60
Farm & Nonfarm Assets
$18,097
14,706
0
33,933
85,357
6,375
18,412
$176,880
$3,681,086
$18,740
11,733
0
32,422
90,275
6,625
24,698
$184,493
$3,919,173
$5,460
54,366
379,686
22,750
83,530
5,850
2,691
$554,332
$7,730,563
$6,020
59,706
399,686
21,600
99,484
5,850
81,934
$674,279
$8,301,039
$19,132
78,196
4,052
0
$44,562
80,595
6,739
0
$112,470
151,624
2,414
0
$163,562
191,438
8,196
0
82,680
29,417
505,454
444,869
$1,163,799
5,060
$1,168,859
2,340,406
$2,512,227
113,172
29,159
524,768
551,759
$1,350,753
3,861
$1,354,614
2,383,927
$2,564,559
225,088
54,576
1,262,975
1,050,595
$2,859,743
300
$2,860,043
4,316,488
$4,870,520
231,484
64,761
1,433,070
1,162,407
$3,254,918
0
$3,254,918
4,371,842
$5,046,121
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced government receipts
Current Portion:
Intermediate
Long Term
Intermediate61
Long term59
Total Farm Liabilities
Nonfarm Liabilities60
Farm & Nonfarm Liabilities
Farm Net Worth (Equity Capital)
Farm & Nonfarm Net Worth
FINANCIAL MEASURES
Percent equity
Debt/asset ratio-long term
Debt/asset ratio-intermediate & current
Change in net worth with appreciation
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount available for debt service
Cash flow coverage ratio for 2006
Debt coverage ratio for 2006
59
400 to 599 Cows
64%
0.38
0.35
$43,520
$2,786
$628
20%
$242,325
1.02
0.89
Includes discounted lease payments.
Average of farms reporting nonfarm assets and liabilities for 2006.
61
Includes Farm Credit stock & discounted lease payments for cattle & machinery.
60
More than 600 Cows
57%
0.41
0.44
$55,353
$3,082
$474
14%
$462,818
0.95
0.87
59
Table 56.
SELECTED BUSINESS FACTORS BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
Less than
50 Cows
50 to
74 Cows
23
29
27
50
152
64
104
12
1.9
12
0
6.6
3.9
$13.97
$29,293
$190
201
78
134
32
2.1
14
29
7.6
3.5
$22.01
$39,729
$185
246
94
150
51
2.6
17
71
8.6
3.0
$30.96
$62,691
$246
394
175
214
111
2.9
16
64
8.7
2.8
$30.20
$99,633
$253
40
32
718,823
18,070
$11.27
$20.66
$13.77
$844
$4.67
62
48
1,131,800
18,326
$11.23
$18.78
$13.70
$821
$4.48
86
76
1,627,168
18,936
$11.38
$18.10
$13.69
$840
$4.44
142
115
2,813,023
19,818
$11.66
$17.02
$13.92
$835
$4.21
Item
Number of farms
Cropping Program Analysis
Total Tillable acres
Tillable acres rented62
Hay crop acres62
Corn silage acres62
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fertilizer & lime expense/tillable acre
Total machinery costs
Machinery cost/tillable acre
Dairy Analysis
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, lbs.
Operating cost of producing milk/cwt.
Total cost of producing milk/cwt.
Price/cwt. milk sold
Purchased dairy feed/cow
Purchased dairy feed/cwt. milk
Purchased grain & concentrate as
% of milk receipts
Purchased feed & crop expense/cwt. milk
Cull rate
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/tillable acre owned
Real estate/cow
Machinery investment/cow
Asset turnover ratio
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
Labor cost/cow
Labor cost/tillable acre
62
31%
$5.23
27.4%
30%
$5.26
26.5%
75 to
99 Cows
31%
$5.36
26.3%
100 to
199 Cows
30%
$5.14
29.8%
$266,491
$12,192
$5,558
$6,692
$2,200
0.27
$251,991
$9,588
$4,806
$4,294
$2,074
0.34
$279,493
$9,302
$5,272
$3,770
$2,113
0.37
$353,937
$9,575
$6,190
$4,231
$2,067
0.37
1.82
1.11
394,777
22
$1,148
$300
2.35
1.37
482,473
26
$996
$306
2.87
1.37
567,947
30
$887
$310
3.84
1.58
733,354
37
$753
$271
Average of all farms, not only those reporting data.
60
Table 56. (cont'd)
SELECTED BUSINESS FACTORS BY HERD SIZE
240 New York Dairy Farms, 2006
Farms with:
Item
Number of farms
Cropping Program Analysis
Total Tillable acres
Tillable acres rented63
Hay crop acres63
Corn silage acres63
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fertilizer & lime exp./tillable acre
Total machinery costs
Machinery cost/tillable acre
Dairy Analysis
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, lbs.
Operating cost of producing milk/cwt.
Total cost of producing milk/cwt.
Price/cwt. milk sold
Purchased dairy feed/cow
Purchased dairy feed/cwt. milk
Purchased grain & concentrate as
% of milk receipts
Purchased feed & crop expense/cwt. milk
Cull rate
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/tillable acre owned
Real estate/cow
Machinery investment/cow
Asset turnover ratio
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
Labor cost/cow
Labor cost/tillable acre
63
Average of all farms, not only those reporting data.
200 to
299 Cows
300 to
399 Cows
400 to
599 Cows
600 or
More Cows
19
20
24
48
553
277
283
137
3.0
18
56
7.2
2.3
$33.12
$159,145
$279
783
391
383
295
3.6
18
55
9.4
2.3
$27.99
$218,026
$278
1,111
626
523
398
3.0
18
62
8.4
2.3
$41.38
$310,597
$280
1,807
901
857
700
3.6
09
83
7.7
1.8
$37.69
$609,982
$325
247
200
5,309,231
21,454
$11.07
$14.73
$13.72
$909
$4.24
339
277
7,981,621
23,538
$12.08
$15.37
$14.05
$1,005
$4.27
477
392
10,922,928
22,913
$11.80
$15.05
$13.80
$930
$4.06
1,021
818
24,668,665
24,152
$12.33
$14.92
$13.85
$1,049
$4.34
28%
$4.98
28.5%
29%
$4.98
32.3%
28%
$4.93
31.3%
29%
$5.01
32.8%
$341,392
$7,712
$6,917
$3,192
$1,347
0.50
$326,723
$8,305
$7,172
$3,348
$1,554
0.50
$323,743
$7,593
$7,478
$2,914
$1,384
0.52
$341,870
$7,246
$8,172
$2,674
$1,191
0.58
5.59
1.63
949,065
44
$665
$297
8.62
1.71
926,211
39
$811
$351
11.18
2.16
976,788
43
$701
$301
21.65
1.95
1,139,299
47
$750
$424
61
SUPPLEMENTAL INFORMATION
Comparisons of business performance by farms buying or growing forages, types of housing and herd size, bST
usage, rotational grazers, milking frequency, same farms over 10 years, and dairy region are presented in this section. Farm
receipts and expenses per cow and per hundredweight of milk sold for different levels of milk output and herd size groups,
plus additional data, are included.
A word of caution to the reader on the interpretation of these data: It is the combination of resources and practices,
and implementation of business management strategies by farmers that determine business performance. Examining one
factor, while not holding all others constant, can lead to erroneous conclusions of cause and effect relationships. As an
example, farms using bST have higher pounds of milk sold per cow. Is it exclusively bST or is it that farms using bST
would have higher milk production per cow without bST? Keep this distinction in mind when reviewing the following data.
Comparison for Farms That Buy All Feed Versus Farms That Grow Forages
Farms specializing in only milk production are a growing trend in New York. In 2006, 14 participating farms,
including owners and renters, purchased the majority of their feed, including all forages. Less than 10 acres of crops were
harvested by the average farm. Table 57 highlights the income and expenses for these 14 farms compared to the income and
expenses for 145 farms of similar size that grew their forages. Table 58 compares selected business factors for the two
groups of farms. In 2006, the 14 farms buying forages were, on average, lower for most measures of profitability than the
similar size farms growing forages. While milk receipts per cow were higher, operating costs of producing milk were also
$0.57 per hundredweight higher.
Comparison by Type of Barn and Herd Size
When analyzing a dairy farm business by comparing it to a group of farms, it is important that the group of farms
have as many of the same physical characteristics as possible as the farm being analyzed. To assist in this endeavor, dairy
farms in the summary have been divided into those with freestall and those with conventional housing. Conventional
housing includes stanchion and tiestall barns. Within each group, is a further classification by size of the dairy herd.
Table 59 on page 65 includes the average values for the resulting five groups of dairy farms. The average size in the five
groups ranges from 45 cows on the small conventional farms to 737 cows on the largest freestall farms. The largest freestall
farms averaged the highest milk output per cow and per worker, the lowest total cost of production and investment per cow,
and the greatest returns to labor, management and capital.
Farm business charts have been computed for each of the five housing and herd size categories and are on pages 6670. By comparing the farm's performance on the most appropriate business chart, a farm manager will be better able to
evaluate his or her business performance. Each column of the farm business chart is independent of the others.
Comparison of Farms by bST Usage
Farms adopting bovine somatotropin (bST) sold more milk per cow and had larger herds (Table 65). Farms using
bST were also more profitable in 2006 when measured by net farm income. However, their operating costs of producing
milk per hundredweight were $0.52 higher than farms not using bST.
Farms not using bST showed a 1.8 percent increase in pounds of milk sold per cow, from 19,291 pounds in 2002 to
19,644 pounds in 2006. Farms using bST increased milk sold per cow 3.0 percent, from 23,770 pounds per cow in 2002 to
24,472 pounds per cow in 2006. Farms that used bST in 2002 through 2006 were larger, and increased in size more rapidly
than did farms not supplementing with bST. Farms not using bST increased by 25 cows, from an average of 178 cows in
2002 to 203 in 2006. Farms adopting bST increased by 151 cows, up to 662 cows in 2006. Farms using bST saw an
increase in net worth. Debt to asset ratio and debt per cow changed very little over the study period. The reader is again
reminded that bST is not solely responsible for the total changes; size and other factors are also significant.
Comparison of Data, Same Farms, 1997 - 2006
Follow ten years of growth, change and progress made by 53 New York DFBS farms in Table 66, pages 72 and 73.
Milk receipts per hundredweight are higher by $0.15, however, profitability is significantly lower in 2006 when compared to
1997. Care should be exercised in using these data to indicate change in the dairy industry since the composition of the
sample of farms is different from the state as a whole, and there is considerable year-to-year variability in milk prices.
62
Receipts and Expenses per Hundredweight of Milk and Per Cow
Average accrual receipts and expenses per cow and per hundredweight of milk sold are listed for 52 dairy farms
selling less than 18,000 pounds of milk per cow, 76 farms with 18,000 to 22,000 pounds of milk sold per cow, and 112 dairy
farms selling 22,000 pounds and more in Table 67 on page 74. Table 68 on page 75 provides the same list of average
accrual receipts and expenses for 59 farms averaging less than 80 cows per farm, 66 farms with 80 to 180 cows and 115
farms with 180 cows or more.
These data are very useful for forward planning or budgeting when a farmer or planner does not have complete and
accurate data from his or her own farm business. It is important to use the costs and returns per unit of output that most
closely fit the level of production and herd size that is included in the plan. For example, an expansion budget for a 20,000
pound herd should include higher feed costs per cow than a budget for an 18,000 pound herd. Herds with more than 180
cows must budget for higher hired labor costs per cow than smaller herds. These data should also be adjusted to the
operating characteristics of the farm being budgeted. Most farms are not average. It is always better to have data on the
specific farm being budgeted.
Intensive Grazing Farms vs. Non-Grazing Farms
In 2006, 42 of the DFBS cooperators practiced intensive grazing. Intensive grazing means the dairy herd was on
pasture for three months or more and was moved to a new paddock every third day or less and at least 30 percent of the
forage was from pasture. The farms using intensive grazing are compared with a control group of non-grazing farms in
Table 69. The control group is a selection of non-grazing dairy farms of similar size. In 2006, average profitability was
higher on intensive grazing farms. Operating costs of producing milk were $1.18 per hundredweight lower while total costs
were $1.08 per hundredweight lower than the costs of production on the control farms. Table 69 also includes a comparison
of 12 profitable grazing farms to 25 profitable non-grazing farms. A publication containing detailed information on New
York farms using intensive grazing is available from the Department of Applied Economics and Management. An order
form is included in the department website: http://aem.cornell.edu/order/index.htm or contact Linda Putnam (e-mail:
ldp2@cornell.edu, phone: 607-255-8429).
Comparison of Farms by Milking Frequency
Thirty-two percent of the 240 DFBS farms utilized three times per day (3X) milking in 2006. Most of the
remaining farms milked twice per day (2X). Two years of selected average business and cost of milk production factors
from the two milking frequency groups are compared in Table 70.
In 2006, the 3X farms averaged 6 more cows per farm, sold 1.2 percent more milk per cow, decreased the total cost
of producing milk by 0.5 percent, but showed an average $327,722 decrease in net farm income, compared to the 3X farm
averages for 2005. The 2X farms decreased milk output per cow 0.4 percent, decreased total production costs $0.29 per
hundredweight but decreased average net farm income $57,219 per farm in 2006 compared to 2005.
The 3X farms averaged 20.4 percent more milk per cow and 35 percent additional milk per worker in 2006
compared with the 2X farms. Similar differences were found in 2005. In 2006, the average total cost of producing milk was
7 percent lower on 3X farms than on 2X dairies. On the average, farmers milking 3X sold more milk per cow and per
worker, produced milk at lower costs per hundredweight and received higher returns for their labor, management and capital
than the average dairy farmer milking 2X. However, milking frequency was not the only, and probably not the most
important, factor that contributed to financial success on these dairy farms. Comparison of herd size, crop yields, labor and
capital efficiency indicates there are other important management differences contributing to higher profits.
Comparison of Dairy Farm Business Data by Region
Average farm business summary data from five regions of the State are compared in Tables 71 and 72. The
Western and Central Plain Region averaged the highest profitability, the largest average farm size and highest average rate of
milk production. Dairy farmers in this region have increased milk production 27.1 percent from 1996-2006 and they
produced milk for an average total cost of $14.68 per hundredweight in 2006. Total milk production has declined 10.9
percent from 1996-2006 in the Central Valleys Region (Figure 2). However, this is the region with the second highest return
per hundredweight to labor, management and capital. Western and Central Plateau Region had the highest return per
hundredweight to labor, management and capital with $1.37.
Other Comparisons
Twenty-two dairy renter farms were smaller, on average, and averaged lower labor and management incomes than
the average for 240 owned dairy farms (Table 73). A forthcoming publication contains detailed information on New York
dairy renters (see http://aem.cornell.edu/order/index.htm ). Data for the top 10 percent of farms by rate of return on all
capital without appreciation is presented in Table 74. Additional data for the top 10 percent of farms is presented in many of
the first 46 tables of this publication. Summary data for the 240 specialized dairy farms are presented in Table 75.
63
Table 57.
INCOME & EXPENSE COMPARISON FOR
FARMS BUYING MAJORITY OF FORAGES VERSUS SIMILAR SIZE FARMS GROWING FORAGES, 2006
Item
14 Farms Buying
145 Similar Size Farms
Majority of Forages
Growing Forages
Number of cows per farm
Pounds of milk sold
Income
Milk sold
Dairy cattle
Dairy calves
Other livestock
Crops
Miscellaneous
Total Accrual Receipts
223
233
5,228,169
5,183,329
Per Cow
$3,301
325
110
0
16
119
$3,871
Per Cwt.
$14.06
1.39
0.47
0.00
0.07
0.51
$16.50
Per Cow
$3,093
258
64
17
76
229
$3,737
$ 440
883
506
1
3
$ 1.87
3.76
2.15
0.00
0.01
$ 518
900
35
1
3
$ 2.33
4.04
0.16
0.00
0.01
Machinery hire, rent/lease
Machinery repairs/vehicle expense.
Fuel, oil & grease
66
106
88
0.28
0.45
0.38
83
184
145
0.37
0.82
0.65
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease/rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expenses
89
39
129
167
60
65
0
140
21
15
16
0.38
0.17
0.55
0.71
0.26
0.27
0.00
0.60
0.09
0.07
0.07
8
55
143
189
62
82
2
52
38
13
22
0.03
0.25
0.64
0.85
0.28
0.37
0.01
0.23
0.17
0.06
0.10
Fertilizer & lime
Seeds & plants
Spray, other crop expenses
Crop professional fees
3
16
2
0
0.01
0.07
0.01
0.00
81
58
40
6
0.37
0.26
0.18
0.02
Land/bldg/fence repair
Taxes
Rent & lease
37
23
40
0.16
0.10
0.17
51
54
61
0.23
0.24
0.27
29
92
218
20
16
$3,325
137
0
115
188
$3,765
$ 106
0.12
0.39
0.93
0.09
0.07
$14.18
0.59
0.00
0.49
0.80
$16.06
$ 0.44
40
102
164
16
25
$3,230
32
4
166
106
$3,538
$ 199
0.18
0.46
0.74
0.07
0.11
$14.52
0.15
0.02
0.74
0.48
$15.91
$ 0.88
Expenses
Hired labor
Dairy grain & concentrate
Dairy roughage
Nondairy
Professional nutritional services
Insurance
Utilities
Interest paid
Other professional fees
Miscellaneous
Total Operating Expenses
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
Total Accrual Expenses
Net Farm Income (without appreciation)
Per Cwt.
$13.89
1.16
0.29
0.08
0.34
1.03
$16.79
64
Table 58.
SELECTED BUSINESS FACTORS FOR FARMS BUYING MAJORITY OF FORAGES
VERSUS SIMILAR SIZE FARMS GROWING FORAGES, 2006
Selected Factors
Size of Business
Average number of cows
Average number of heifers
Milk sold, lbs.
Worker equivalent
Total tillable acres
Tillable acres harvested
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
Labor Efficiency & Costs
Cows per worker
Milk sold/worker, lbs.
Hired labor cost/cwt.
Hired labor cost/worker
Hired labor cost as % of milk sales
Cost Control
Grain & concentrate purchased as % of milk sales
Grain & concentrate per cwt. milk
Dairy feed & crop expense per cwt. milk
Labor & machinery costs/cow
Total farm operating costs per cwt. sold
Interest costs per cwt. milk
Milk marketing costs per cwt. milk sold
Operating cost of producing cwt. of milk
Capital Efficiency(average for the year)
Farm capital per cow
Machinery & equipment per cow
Asset turnover ratio
Income Generation
Gross milk sales per cow
Gross milk sales per cwt.
Net milk sales per cwt.
Dairy cattle sales per cow
Dairy calf sales per cow
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per operator/manager
Rate of return on equity capital without appreciation
Rate of return on all capital without appreciation
Cash flow
Principal & interest payments per cow, 2006
Net cash flow
Financial Summary
Farm net worth, end year
Farm net worth change from last year, %
Debt to asset ratio
Farm debt per cow
14 Farms Buying
Majority of Forages
145 Similar Size Farms
Growing Forages
223
141
5,228,169
4.87
76
64
233
195
5,183,329
6.05
575
556
23,475
0.0
0.0
22,259
3.0
17.3
46
1,073,730
$1.87
$34,957
13.3%
39
857,457
$2.33
$30,547
16.8%
29%
$3.76
$6.01
$1,109
$14.18
$0.93
$0.71
$12.34
29%
$4.04
$5.03
$1,419
$14.52
$0.74
$0.85
$11.77
$6,253
$768
0.66
$8,112
$1,540
0.49
$3,301
$14.06
$13.35
$325
$110
$3,093
$13.89
$13.05
$258
$64
$22,414
$76,467
$-13,556
-7.2%
0.5%
$45,888
$94,142
$-15,203
-1.6%
0.9%
$543
$158,548
$519
$150,303
$581,432
3.1%
0.60
$3,783
$1,309,544
2.2%
0.32
$2,618
65
Table 59.
Item
SELECTED BUSINESS FACTORS BY TYPE OF BARN AND HERD SIZE
226 New York Dairy Farms, 2006
Conventional
Freestall
151-300
Farms with:
<= 60 Cows
>60 Cows
<=150 Cows
Cows
Number of farms
Cropping Program Analysis
Total Tillable acres
Tillable acres rented64
Hay crop acres64
Corn silage acres64
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fertilizer & lime expense/tillable acre
Total machinery costs
Machinery cost/tillable acre
Dairy Analysis
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, lbs.
Operating cost of producing milk/cwt.
Total cost of producing milk/cwt.
Price/cwt. milk sold
Purchased dairy feed/cow
Purchased dairy feed/cwt. milk
Purchased grain & concentrate as % of
milk receipts
Purchased feed & crop expense/cwt milk
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/tillable acre owned
Real estate/cow
Machinery investment/cow
Asset turnover ratio
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
Labor cost/cow
Labor cost/tillable acre
Profitability & Balance Sheet Analysis
Net farm income (without appreciation)
Labor & management income/operator
Rate return on all capital with appreciation
Farm debt/cow
Percent equity
64
>300 Cows
33
31
40
32
90
163
72
112
18
1.9
13.0
32
6.7
3.7
$18.16
$30,680
$185
291
108
177
58
2.4
15.0
48
8.2
3.3
$26.07
$65,384
$225
268
125
162
70
2.6
15.9
67
8.3
2.7
$31.06
$72,772
$252
509
227
255
146
3.1
17.7
55
8.2
2.5
$35.50
$139,662
$270
1,412
722
671
540
3.5
18.8
68
8.0
2.0
$36.49
$445,945
$310
45
36
812,007
17,985
$10.89
$19.50
$13.70
$827
$4.60
88
73
1,623,888
18,441
$11.43
$18.55
$13.75
$742
$4.02
103
85
1,952,823
19,006
$12.12
$18.29
$13.99
$917
$4.82
212
169
4,634,237
21,889
$11.15
$15.05
$13.72
$916
$4.18
737
594
17,592,917
23,880
$12.21
$14.98
$13.86
$1,024
$4.29
31%
$5.28
29%
$4.95
32%
$5.74
28%
$5.02
29%
$4.99
$272,686
$11,234
$5,572
$5,840
$2,152
0.30
$293,447
$9,964
$4,797
$3,942
$2,629
0.33
$317,114
$9,413
$6,749
$4,156
$2,015
0.36
$345,627
$8,358
$6,281
$3,620
$1,494
0.46
$338,825
$7,414
$7,921
$2,792
$1,251
0.56
1.86
1.13
435,977
24
$1,041
$288
2.99
1.46
542,653
29
$895
$271
3.05
1.51
641,321
34
$804
$308
5.12
1.64
905,419
41
$700
$291
16.12
1.97
1,091,541
46
$746
$389
$11,533
$-14,350
-2.5%
$2,608
76%
$12,103
$-21,733
-1.2%
$2,137
79%
$5,886
$-24,984
-1.2%
$2,554
73%
Average of all farms, not only those reporting data.
$64,354
$-1,615
3.9%
$2,529
69%
$71,152
$-48,899
4.9%
$3,048
59%
66
Table 60.
FARM BUSINESS CHART FOR SMALL CONVENTIONAL STALL DAIRY FARMS
33 Conventional Stall Dairy Farms with 60 or Less Cows, New York, 2006
Worker
Equivalent
Size of Business
No.
Pounds
of
Milk
Cows
Sold
Pounds
Milk Sold
Per Cow
Rates of Production
Tons
Tons Corn
Hay Crop
Silage
DM/Acre
Per Acre
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Worker
Per Worker
2.96
59
1,192,109
24,092
3.7
20
40
815,100
2.50
55
1,022,366
22,470
3.0
18
36
642,167
2.22
52
982,135
20,497
2.6
16
32
566,243
2.07
50
954,362
19,848
2.3
14
28
525,681
1.92
47
889,922
19,286
2.1
13
25
451,840
------------------------------------------------------------------------------------------------------------------------------------------------------1.82
45
827,669
17,946
2.0
12
25
423,297
1.58
44
797,005
17,083
1.9
12
23
389,718
1.49
41
747,286
15,205
1.8
11
22
365,412
1.41
36
569,820
14,110
1.5
9
19
321,522
1.17
30
382,780
12,138
0.9
7
16
236,755
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Cost Control
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$337
16%
$312
$1,070
$465
$3.18
580
24
464
1,303
711
4.12
661
27
525
1,440
820
4.72
701
30
600
1,559
892
4.90
752
31
649
1,725
930
5.10
------------------------------------------------------------------------------------------------------------------------------------------------------790
33
712
1,840
1,002
5.18
848
34
737
1,959
1,039
5.60
915
35
815
2,078
1,089
6.20
1,016
39
983
2,416
1,298
7.05
1,155
47
1,191
2,669
1,435
8.30
Value and Cost of Production
Milk
Operating Cost
Total Cost
Receipts
Producing Milk
Production
Per Cow
Per Cwt.
Per Cwt.
Profitability
Net Farm Income
Without Appreciation
Total
Per Cow
Labor &
Mgmt. Income
Per Operator
Change in
Net Worth
w/Appreciation
$3,229
$7.01
$13.74
$55,764
$1,111
$35,285
$60,691
3,106
8.72
17.03
36,861
829
7,558
19,430
2,907
9.52
17.99
28,102
687
3,047
14,650
2,724
10.03
18.73
24,784
504
-2,217
11,494
2,604
10.29
19.13
18,710
399
-4,368
7,836
------------------------------------------------------------------------------------------------------------------------------------------------------2,454
10.55
19.66
15,313
353
-10,192
3,294
2,361
11.14
21.25
9,672
257
-16,497
529
2,151
12.47
23.35
5,947
161
-30,598
-3,217
1,880
13.21
24.43
-663
-23
-50,984
-6,700
1,664
19.26
27.59
-52,039
-1,077
-64,639
-44,982
67
Table 61.
FARM BUSINESS CHART FOR LARGE CONVENTIONAL STALL DAIRY FARMS
31 Conventional Stall Dairy Farms with More Than 60 Cows, New York, 2006
Worker
Equivalent
Size of Business
No.
Pounds
of
Milk
Cows
Sold
Pounds
Milk Sold
Per Cow
Rates of Production
Tons
Tons Corn
Hay Crop
Silage
DM/Acre
Per Acre
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Worker
Per Worker
4.35
135
2,472,209
25,249
3.7
20
54
1,078,074
3.76
120
2,158,230
22,777
3.4
20
43
747,577
3.39
97
1,918,592
20,915
3.2
19
39
696,173
3.22
91
1,818,612
20,105
2.7
17
33
632,396
3.13
86
1,675,584
19,567
2.4
16
30
601,404
------------------------------------------------------------------------------------------------------------------------------------------------------3.03
78
1,467,295
18,704
2.3
15
29
583,983
2.96
75
1,397,258
17,486
2.1
15
27
536,303
2.71
73
1,310,830
16,462
2.0
13
24
441,855
2.14
69
1,229,133
15,415
1.8
12
23
360,779
1.69
65
999,329
12,042
1.2
10
18
276,423
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Cost Control
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$237
11%
$340
$970
$433
$2.68
471
19
468
1,286
611
3.47
589
23
568
1,389
764
4.02
652
26
621
1,427
826
4.25
718
28
657
1,519
880
4.64
------------------------------------------------------------------------------------------------------------------------------------------------------761
29
687
1,684
915
5.06
860
31
735
1,812
1,059
5.36
916
34
787
1,942
1,139
5.93
1,051
43
942
2,129
1,229
6.92
1,175
49
1,477
2,487
1,399
8.04
Value and Cost of Production
Milk
Operating Cost
Total Cost
Receipts
Producing Milk
Production
Per Cow
Per Cwt.
Per Cwt.
Profitability
Net Farm Income
Without Appreciation
Total
Per Cow
Labor &
Mgmt. Income
Per Operator
Change in
Net Worth
w/Appreciation
$3,448
$8.33
$14.05
$61,538
$732
$27,041
$88,608
3,020
9.27
15.24
45,611
582
10,534
61,926
2,923
9.75
16.25
43,602
492
2,418
31,908
2,756
10.33
17.01
29,765
400
-2,914
19,281
2,627
10.94
17.45
24,864
295
-8,611
12,450
-----------------------------------------------------------------------------------------------------------------------------------------------------2,559
11.59
18.61
16,987
211
-15,394
5,256
2,527
12.10
20.02
11,918
136
-21,575
-5,117
2,275
13.06
21.39
-8,176
-70
-33,407
-15,148
2,130
14.70
21.97
-24,688
-243
-55,561
-30,903
1,667
16.05
31.41
-57,268
-646
-111,988
-78,830
68
Table 62.
FARM BUSINESS CHART FOR SMALL FREESTALL DAIRY FARMS
40 Freestall Barn Dairy Farms with 150 or Less Cows, New York, 2006
Size of Business
Rates of Production
Labor Efficiency
Worker
No.
Pounds
Pounds
Tons
Tons Corn
Cows
Pounds
Equivof
Milk
Milk Sold
Hay Crop
Silage
Per
Milk Sold
alent
Cows
Sold
Per Cow
DM/Acre
Per Acre
Worker
Per Worker
4.44
147
3,009,202
23,975
5.4
23
54
1,020,554
4.14
138
2,646,140
22,739
4.2
22
45
802,089
3.91
130
2,446,828
21,775
3.7
20
40
740,894
3.45
119
2,248,574
19,910
3.5
19
36
682,575
3.18
109
2,151,144
18,982
3.0
19
34
642,635
------------------------------------------------------------------------------------------------------------------------------------------------------2.79
97
2,000,472
18,384
2.6
18
33
614,097
2.55
88
1,671,262
18,043
2.3
16
32
581,642
2.30
84
1,467,241
17,449
2.1
14
30
541,226
2.21
66
1,146,756
15,389
1.7
11
25
484,770
1.51
50
740,611
12,326
1.3
7
21
363,039
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Cost Control
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$486
22%
$307
$913
$642
$4.14
639
26
382
1,131
840
4.62
716
28
489
1,217
898
4.91
747
30
545
1,290
976
5.24
797
31
601
1,353
1,035
5.64
------------------------------------------------------------------------------------------------------------------------------------------------------853
32
638
1,455
1,077
5.96
921
35
717
1,614
1,198
6.20
949
36
865
1,792
1,295
6.65
1,052
38
1,012
1,972
1,371
6.97
1,257
42
1,326
2,540
1,612
7.66
Value and Cost of Production
Milk
Operating Cost
Total Cost
Receipts
Producing Milk
Production
Per Cow
Per Cwt.
Per Cwt.
Profitability
Net Farm Income
Without Appreciation
Total
Per Cow
Labor &
Mgmt. Income
Per Operator
Change in
Net Worth
w/Appreciation
$3,308
$8.25
$13.95
$84,862
$786
$20,428
$134,309
3,177
9.72
15.90
54,526
562
7,529
52,952
3,014
10.26
16.71
44,353
411
-2,928
25,788
2,808
10.70
17.26
26,066
255
-9,030
18,006
2,630
11.47
17.87
14,580
155
-19,517
9,120
------------------------------------------------------------------------------------------------------------------------------------------------------2,591
12.37
18.63
996
-5
-27,570
3,019
2,492
13.02
19.18
-10,879
-119
-37,765
-6,404
2,377
13.71
20.64
-28,779
-277
-53,931
-18,299
2,200
14.83
21.71
-40,264
-448
-76,273
-33,853
1,775
16.83
25.74
-86,598
-851
-140,434
-66,774
69
Table 63.
FARM BUSINESS CHART FOR MEDIUM FREESTALL DAIRY FARMS
32 Freestall Barn Dairy Farms with 151-300 Cows, New York, 2006
Size of Business
Rates of Production
Labor Efficiency
Worker
No.
Pounds
Pounds
Tons
Tons Corn
Cows
Pounds
Equivof
Milk
Milk Sold
Hay Crop
Silage
Per
Milk Sold
alent
Cows
Sold
Per Cow
DM/Acre
Per Acre
Worker
Per Worker
6.85
295
6,803,733
26,202
6.2
27
56
1,262,341
6.40
266
6,199,266
24,268
4.2
24
53
1,134,379
6.10
244
5,663,779
23,844
3.7
22
50
1,054,796
5.81
233
5,304,067
22,760
3.5
20
47
984,712
5.32
224
4,893,865
22,360
3.3
18
44
965,082
------------------------------------------------------------------------------------------------------------------------------------------------------4.97
210
4,362,160
21,728
3.3
18
41
944,801
4.65
191
3,813,986
21,099
3.2
17
38
854,606
4.41
175
3,700,072
19,976
2.7
15
36
799,302
3.96
160
3,485,104
19,600
2.3
13
34
710,021
3.62
155
3,033,097
17,792
1.2
9
30
609,123
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Cost Control
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$494
17%
$366
$958
$711
$3.38
609
22
518
1,146
824
4.21
684
25
583
1,226
888
4.46
834
27
615
1,290
1,038
4.93
867
30
648
1,331
1,117
5.07
------------------------------------------------------------------------------------------------------------------------------------------------------894
31
722
1,422
1,174
5.16
1,007
31
760
1,526
1,228
5.31
1,035
33
800
1,606
1,282
5.44
1,069
34
833
1,689
1,306
5.74
1,220
40
1,012
1,850
1,492
6.88
Value and Cost of Production
Milk
Operating Cost
Total Cost
Receipts
Producing Milk
Production
Per Cow
Per Cwt.
Per Cwt.
Profitability
Net Farm Income
Without Appreciation
Total
Per Cow
Labor &
Mgmt. Income
Per Operator
Change in
Net Worth
w/Appreciation
$3,491
$8.13
$12.15
$180,461
$866
$97,756
$231,312
3,331
9.68
13.28
148,574
624
70,187
151,076
3,243
10.10
14.09
128,360
547
46,110
83,350
3,140
10.44
14.99
112,749
524
21,853
57,576
3,086
10.69
15.46
91,102
427
6,880
49,736
------------------------------------------------------------------------------------------------------------------------------------------------------3,011
11.28
15.78
65,600
334
-6,094
33,845
2,888
12.23
16.11
48,907
262
-18,454
14,890
2,808
12.65
16.50
7,306
45
-30,134
-10,534
2,674
13.54
17.13
-22,496
-116
-64,698
-20,075
2,480
14.54
18.65
-49,965
-260
-105,913
-106,776
70
Table 64.
FARM BUSINESS CHART FOR LARGE FREESTALL DAIRY FARMS
90 Freestall Barn Dairy Farms with 300 or More Cows, New York, 2006
Size of Business
Rates of Production
Labor Efficiency
Worker
No.
Pounds
Pounds
Tons
Tons Corn
Cows
Pounds
Equivof
Milk
Milk Sold
Hay Crop
Silage
Per
Milk Sold
Alent
Cows
Sold
Per Cow
DM/Acre
Per Acre
Worker
Per Worker
36.03
1,810
45,183,773
27,268
6.5
25
72
1,600,266
25.13
1,107
27,312,355
25,866
4.9
23
55
1,299,401
20.33
945
21,841,861
25,141
4.2
21
52
1,228,778
17.33
739
18,196,941
24,602
3.8
20
49
1,158,575
14.55
643
15,574,548
24,086
3.5
20
47
1,098,777
------------------------------------------------------------------------------------------------------------------------------------------------------12.45
562
12,842,749
23,589
3.2
18
44
1,031,749
11.07
468
10,755,092
23,022
3.0
18
41
981,735
9.59
418
9,257,135
22,195
2.7
16
39
934,132
8.28
358
8,048,583
21,380
2.3
15
35
818,668
6.41
316
6,916,134
18,120
1.8
12
31
699,839
Grain
Bought
Per Cow
% Grain is
of Milk
Receipts
Machinery
Costs
Per Cow
Cost Control
Labor &
Machinery
Costs Per Cow
Feed & Crop
Expenses
Per Cow
Feed & Crop
Expenses Per
Cwt. Milk
$643
22%
$391
$981
$846
$3.92
788
24
492
1,119
1,008
4.38
840
26
532
1,226
1,065
4.58
875
27
562
1,309
1,121
4.76
924
28
613
1,368
1,152
4.91
------------------------------------------------------------------------------------------------------------------------------------------------------962
29
645
1,398
1,178
5.09
994
30
670
1,456
1,225
5.22
1,026
32
708
1,505
1,282
5.37
1,079
33
762
1,569
1,347
5.70
1,245
35
868
1,726
1,518
6.09
Value and Cost of Production
Milk
Operating Cost
Total Cost
Receipts
Producing Milk
Production
Per Cow
Per Cwt.
Per Cwt.
Profitability
Net Farm Income
Without Appreciation
Total
Per Cow
Labor &
Mgmt. Income
Per Operator
Change in
Net Worth
w/Appreciation
$3,879
$9.94
$13.10
$505,232
$621
$156,812
$582,002
3,617
10.68
13.80
234,784
455
51,000
231,461
3,486
11.05
14.16
165,121
348
18,977
148,971
3,392
11.48
14.44
135,942
199
-535
112,773
3,310
11.92
14.90
87,077
125
-34,348
65,450
------------------------------------------------------------------------------------------------------------------------------------------------------3,242
12.35
15.17
43,559
67
-58,502
2,109
3,157
12.65
15.40
4,213
11
-75,082
-29,412
3,093
12.94
15.87
-32,305
-59
-109,530
-80,368
2,970
13.48
16.31
-78,751
-140
-165,483
-166,542
2,604
14.62
18.09
-353,349
-383
-308,007
-426,908
71
Table 65.
2002
bST NON-USERS VS. USERS
Same 57 Farms, 2002 - 2006
35 Farms Not Using bST in 2002 - 2006
2003
2004
2005
2006
2002
22 Farms Using bST in 2002 - 2006
2003
2004
2005
2006
203
150
39,962
4.90
435
511
399
121,476
11.33
981
539
419
126,138
12.07
1,095
597
448
137,031
13.32
1,157
635
487
152,957
14.00
1,210
662
505
162,014
14.49
1,238
20,065
2.7
19
19,644
2.9
18
23,770
3.7
15
23,394
3.6
17
22,948
3.5
18
24,082
3.5
19
24,472
3.5
19
40
805,136
42
815,557
45
1,072,164
45
1,045,051
45
1,028,760
45
1,092,551
46
1,118,106
Selected Factors
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
178
124
34,387
4.51
411
183
131
35,005
4.51
426
186
136
36,828
4.72
429
191
144
38,405
4.77
444
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
19,291
2.7
15
19,083
3.0
16
19,836
3.2
18
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
40
762,890
41
776,155
39
780,244
Cost Control
Grain & concentrate purchased
as percent of milk sales
Dairy feed and crop expense
per cwt. milk
Labor and mach. costs per cow
Operating cost of producing
milk per cwt.
$4.87
$1,138
$4.91
$1,167
$5.57
$1,257
$5.40
$1,292
$5.12
$1,260
$4.63
$1,233
$4.90
$1,236
$5.31
$1,282
$4.73
$1,346
$4.70
$1,378
$10.09
$10.46
$11.79
$11.73
$11.39
$10.99
$11.30
$12.24
$11.77
$11.91
Capital Efficiency (avg. for year)
Farm capital per cow
Machinery and equip. per cow
Asset turnover ratio
$6,908
$1,372
0.45
$6,917
$1,357
0.47
$7,278
$1,426
0.55
$7,793
$1,511
0.53
$7,944
$1,501
0.43
$6,564
$1,148
0.58
$6,699
$1,113
0.57
$6,698
$1,092
0.70
$7,033
$1,145
0.67
$7,367
$1,194
0.57
$52,148
$64,660
$51,901
$88,453
$133,114
$171,806
$110,802
$177,087
$52,894
$82,370
$72,078
$184,679
$89,726
$198,334
$417,508
$597,743
$458,255
$638,609
$105,601
$290,277
$4,767
$3,219
$60,196
$36,897
$-7,099
$-18,456
$-10,166
$164,696
$166,271
$-27,457
Profitability
Net farm income without apprec
Net farm income with apprec.
Labor & management income
per operator/manager
Rate return on equity capital
with appreciation
Rate return on all capital
with appreciation
Financial Summary (end of year)
Farm net worth
Debt to asset ratio
Farm debt per cow
30%
29%
27%
27%
29%
28%
31%
26%
24%
28%
1.4%
4.2%
13.2%
12.3%
1.8%
4.7%
5.2%
21.6%
19.7%
6.2%
2.7%
4.3%
10.2%
10.0%
3.3%
4.7%
4.7%
14.3%
14.0%
6.2%
$753,691
0.40
$2,726
$817,209
0.37
$2,550
$942,218
0.33
$2,486
$1,053,986 $1,091,394 $2,011,851
0.33
0.34
0.41
$2,682
$2,715
$2,710
$2,115,255
0.44
$3,023
$2,548,080
0.40
$2,700
$2,976,752
0.37
$2,652
$3,152,545
0.37
$2,736
72
Table 66.
COMPARISON OF FARM BUSINESS SUMMARY DATA
Same 53 New York Dairy Farms, 1997 - 2006
Selected Factors
1997
1998
1999
2000
Milk receipts per cwt. milk
$13.75
$15.74
$15.28
$13.45
Size of Business
Average number of cows
Average number of heifers
Milk sold, cwt.
Worker equivalent
Total tillable acres
281
206
61,574
6.94
611
301
229
65,319
7.24
636
318
236
71,452
7.62
667
338
251
76,307
7.83
684
Rates of Production
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
21,885
2.8
16
21,709
3.5
22
22,444
3.3
17
22,551
3.7
15
Labor Efficiency
Cows per worker
Milk sold per worker, lbs.
41
887,238
42
902,200
42
937,695
43
974,546
Cost Control
Grain & concentrate purchased as % of milk sales
Dairy feed & crop expense per cwt. milk
Operating cost of producing cwt. milk
Total cost of producing cwt. milk
Hired labor cost per cwt.
Interest paid per cwt.
Labor & machinery costs per cow
Replacement livestock expense
Expansion livestock expense
33%
$5.36
$11.62
$14.19
$2.13
$0.86
$1,028
$13,013
$18,188
25%
$5.06
$11.53
$14.39
$2.25
$0.84
$1,109
$15,341
$18,262
24%
$4.76
$11.15
$14.05
$2.34
$0.74
$1,186
$17,626
$19,128
27%
$4.60
$11.30
$14.20
$2.40
$0.88
$1,212
$21,448
$33,150
$6,059
$1,085
$2,461
$1,505
0.56
$6,187
$1,158
$2,401
$1,515
0.65
$6,410
$1,212
$2,425
$1,548
0.63
$6,507
$1,251
$2,399
$1,605
0.57
$74,138
$80,783
$199,213
$245,478
$199,889
$244,050
$70,994
$124,052
$14,589
$91,537
$84,268
$1,349
Capital Efficiency
Farm capital per cow
Machinery & equipment per cow
Real estate per cow
Livestock investment per cow
Asset turnover ratio
Profitability
Net farm income without appreciation
Net farm income with appreciation
Labor & management income per
operator/manager
Rate return on:
Equity capital with appreciation
All capital with appreciation
All capital without appreciation
Financial Summary, End Year
Farm net worth
Change in net worth with appreciation
Debt to asset ratio
Farm debt per cow
2.9%
4.8%
4.4%
$988,466
$18,055
0.43
$2,627
17.5%
13.1%
10.6%
$1,160,451
$174,364
0.41
$2,582
15.1%
11.5%
9.8%
4.7%
5.8%
3.4%
$1,280,068
$134,609
0.40
$2,653
$1,298,955
$21,559
0.42
$2,666
73
Table 66. (continued)
COMPARISON OF FARM BUSINESS SUMMARY DATA
Same 53 New York Dairy Farms, 1997 - 2006
2001
2002
2003
2004
2005
2006
$15.95
$12.99
$13.29
$16.63
$16.07
$13.90
365
271
81,948
8.41
719
385
293
89,179
8.81
753
406
308
93,118
9.36
781
418
319
95,131
9.77
832
432
340
102,336
9.92
855
447
353
104,569
10.00
883
22,461
3.1
17
23,170
3.5
16
22,948
3.3
18
22,774
3.5
18
23,666
3.5
19
23,419
3.3
18
43
974,406
44
1,012,251
43
994,855
43
973,706
44
1,031,617
45
1,045,687
25%
$4.96
$12.38
$15.39
$2.61
$0.78
$1,287
$16,503
$35,780
29%
$4.80
$11.14
$14.06
$2.65
$0.58
$1,286
$15,268
$14,665
30%
$5.05
$11.60
$14.33
$2.69
$0.52
$1,255
$20,083
$16,932
27%
$5.61
$12.50
$15.36
$2.79
$0.54
$1,324
$19,186
$20,875
26%
$5.25
$12.27
$15.26
$2.66
$0.60
$1,372
$18,901
$18,010
29%
$5.04
$12.23
$15.20
$2.70
$0.78
$1,378
$13,618
$26,472
$6,557
$1,239
$2,430
$1,693
0.66
$6,662
$1,249
$2,459
$1,781
0.56
$6,539
$1,200
$2,440
$1,778
0.57
$6,844
$1,233
$2,529
$1,857
0.67
$7,253
$1,304
$2,614
$1,980
0.64
$7,493
$1,333
$2,729
$2,076
0.54
$184,224
$291,790
$42,865
$97,747
$44,840
$111,695
$271,657
$404,215
$251,487
$377,137
$42,934
$126,106
$62,515
$-19,168
$-22,455
$116,113
$91,834
$-39,600
15.9%
12.0%
7.5%
$1,499,297
$187,550
0.41
$2,708
2.1%
3.3%
1.1%
$1,497,726
$-10,911
0.42
$2,785
3.0%
3.6%
1.2%
$1,539,289
$37,691
0.43
$2,918
20.1%
13.6%
9.0%
$1,833,929
$305,745
0.39
$2,750
15.6%
11.7%
7.7%
$2,087,045
$261,640
0.36
$2,705
2.5%
4.0%
1.5%
$2,095,552
$6,855
0.39
$2,901
74
Table 67.
FARM RECEIPTS AND EXPENSES PER COW AND PER
HUNDREDWEIGHT FOR THREE LEVELS OF MILK PRODUCTION
240 New York Dairy Farms, 2006
Item
52 Dairy Farms
Milk/Cow <18,000#
Per Cow
Per Cwt.
76 Dairy Farms Milk/Cow
18,000-21,999#
Per Cow
Per Cwt.
112 Dairy Farms
Milk/Cow >22,000#
Per Cow
Per Cwt.
ACCRUAL RECEIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Government receipts
All other
$2,162
279
33
16
20
129
79
$14.63
1.89
0.22
0.11
0.13
0.87
0.54
$2,873
215
69
12
61
129
77
$13.91
1.04
0.33
0.06
0.29
0.63
0.37
$3,399
274
70
7
93
117
65
$13.79
1.11
0.28
0.03
0.38
0.48
0.26
TOTAL ACCRUAL RECEIPTS
$2,718
$18.39
$3,436
$16.64
$4,024
$16.33
$ 296
612
66
0
0
61
167
113
6
33
71
141
28
61
3
19
10
10
21
67
37
30
3
$ 2.00
4.14
0.44
0.00
0.00
0.41
1.13
0.77
0.04
0.22
0.48
0.95
0.19
0.42
0.02
0.13
0.07
0.07
0.14
0.45
0.25
0.20
0.02
$ 481
872
26
1
6
57
167
141
10
55
136
163
52
77
3
48
22
12
21
86
55
40
3
$ 2.33
4.22
0.13
0.01
0.03
0.27
0.81
0.68
0.05
0.27
0.66
0.79
0.25
0.37
0.01
0.23
0.11
0.06
0.10
0.42
0.27
0.19
0.01
$ 659
975
74
0
0
72
176
133
18
54
163
195
78
85
4
78
58
12
17
66
55
39
6
$ 2.67
3.96
0.30
0.00
0.00
0.29
0.72
0.54
0.07
0.22
0.66
0.79
0.32
0.34
0.02
0.32
0.24
0.05
0.07
0.27
0.22
0.16
0.02
34
66
38
42
81
156
12
29
0.23
0.45
0.26
0.29
0.55
1.06
0.08
0.19
46
59
69
45
92
176
15
24
0.22
0.29
0.33
0.22
0.45
0.85
0.07
0.12
55
44
61
38
96
182
21
24
0.22
0.18
0.25
0.16
0.39
0.74
0.09
0.10
$2,310
$15.65
$3,062
$14.82
$3,538
$14.36
46
9
149
75
0.31
0.06
1.01
0.51
15
3
164
117
0.07
0.01
0.79
0.56
55
1
179
121
0.22
0.01
0.73
0.49
$2,589
$17.54
$3,361
$16.25
$3,894
$15.81
ACCRUAL EXPENSES
Labor: Hired
Feed: Dairy grain & concentrate
Dairy roughage
Nondairy
Professional nutritional services
Machinery: Mach. hire, rent & lease
Machinery repairs & vehicle expense
Fuel, oil & grease
Livestock: Replacement livestock
Breeding
Vet & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Crops: Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Real Estate: Land, building &
fence repair
Taxes
Rent & lease
Other: Insurance
Utilities (farm share)
Interest paid
Other professional fees
Miscellaneous
TOTAL OPERATING EXPENSES
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
75
Table 68.
FARM RECEIPTS AND EXPENSES PER COW AND PER
HUNDREDWEIGHT FOR THREE HERD SIZE CATEGORIES
240 New York Dairy Farms, 2006
Item
59 Dairy Farms
with <80 Cows
Per Cow
Per Cwt.
66 Dairy Farms
with 80-180 Cows
Per Cow
Per Cwt.
115 Dairy Farms
with > 180 Cows
Per Cow
Per Cwt.
ACCRUAL RECEIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Government receipts
All other
$2,526
239
69
23
14
168
100
$13.68
1.29
0.38
0.13
0.08
0.91
0.54
$2,708
208
62
3
35
186
78
$13.93
1.07
0.32
0.02
0.18
0.96
0.40
$3,282
268
67
8
89
111
66
$13.85
1.13
0.28
0.04
0.37
0.47
0.28
TOTAL ACCRUAL RECEIPTS
$3,139
$17.00
$3,281
$16.87
$3,892
$16.43
$ 154
750
70
1
0
47
200
141
26
51
87
188
32
89
0
15
13
15
34
67
36
31
1
$ 0.84
4.06
0.38
0.00
0.00
0.25
1.08
0.76
0.14
0.27
0.47
1.02
0.17
0.48
0.00
0.08
0.07
0.08
0.18
0.36
0.20
0.17
0.00
$ 350
807
26
1
4
65
195
150
5
48
107
188
33
81
1
28
21
11
33
80
61
41
2
$ 1.80
4.15
0.14
0.00
0.02
0.33
1.00
0.77
0.02
0.25
0.55
0.96
0.17
0.42
0.00
0.14
0.11
0.06
0.17
0.41
0.31
0.21
0.01
$ 642
949
67
0
1
69
170
131
16
53
158
184
75
81
4
74
52
12
16
70
54
39
5
$ 2.71
4.00
0.28
0.00
0.01
0.29
0.72
0.55
0.07
0.22
0.67
0.78
0.31
0.34
0.02
0.31
0.22
0.05
0.07
0.29
0.23
0.16
0.02
52
102
28
69
123
168
14
27
0.28
0.55
0.15
0.38
0.67
0.91
0.08
0.15
36
68
54
50
106
152
9
26
0.19
0.35
0.28
0.26
0.55
0.78
0.05
0.14
53
44
63
38
91
183
21
24
0.23
0.19
0.27
0.16
0.39
0.77
0.09
0.10
$2,632
$14.25
$2,836
$14.58
$3,438
$14.51
37
11
183
85
0.20
0.06
0.99
0.46
13
11
203
91
0.07
0.06
1.04
0.47
50
0
170
121
0.21
0.00
0.72
0.51
$2,948
$15.96
$3,154
$16.22
$3,779
$15.95
ACCRUAL EXPENSES
Labor: Hired
Feed: Dairy grain & concentrate
Dairy roughage
Nondairy
Professional nutritional services
Machinery: Mach. hire, rent & lease
Mach. repairs & vehicle expense
Fuel, oil & grease
Livestock: Replacement livestock
Breeding
Vet & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Crops: Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Real Estate: Land, building &
fence repair
Taxes
Rent & lease
Other: Insurance
Utilities (farm share)
Interest paid
Other professional fees
Miscellaneous
TOTAL OPERATING EXPENSES
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
76
Table 69.
Item
Number of farms
Business Size & Production
INTENSIVE GRAZING FARMS VS. NON-GRAZING FARMS
New York State Dairy Farms, 2006
All Intensive
Non-Grazing
Profitable
Grazing Farms65
Farms66
Grazing Farms67
42
81
12
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, lbs.
Milk plant test, % butterfat
Cull rate
Tillable acres, total
Hay crop, tons DM/acre
Corn silage, tons/acre
Forage DM/cow, tons
Profitable NonGrazing Farms68
25
101
83
1,716,827
17,054
3.70%
24.5%
254
2.2
15.5
5.4
104
86
2,093,925
20,089
3.78%
29.4%
299
2.6
16.1
8.6
136
114
2,239,169
16,505
3.98%
23.1%
286
2.2
18.9
4.5
155
123
3,347,189
21,645
3.66%
29.3%
354
3.7
19.5
9.2
2.80
614,066
36
$275,654
$7,667
$45
$1,289
3.20
653,501
33
$317,941
$9,761
$49
$1,966
3.15
711,600
43
$303,305
$7,020
$43
$1,002
3.62
925,064
43
$314,465
$7,361
$34
$1,486
$1.52
$4.04
$0.37
$0.10
$0.49
$0.98
$1.10
$10.58
$4.36
$4.18
$16.49
$14.09
$1.57
$4.19
$0.19
$0.07
$0.55
$0.91
$1.37
$11.76
$4.19
$3.92
$17.57
$13.78
$1.88
$3.41
$0.63
$0.04
$0.39
$0.94
$0.91
$8.92
$3.69
$3.64
$13.79
$14.19
$1.32
$3.80
$0.29
$0.01
$0.53
$0.66
$1.48
$9.79
$2.94
$2.77
$13.70
$13.54
Labor & Capital Efficiency
Worker equivalent
Milk sold/worker, lbs.
Cows/worker
Farm capital/worker
Farm capital/cow
Farm capital/cwt. milk
Machinery & equipment per cow
Milk Production Costs & Returns
Selected costs/cwt.:
Hired labor
Grain & concentrate
Purchased roughage
Replacements purchased
Vet & medicine
Milk marketing
Other dairy expenses
Operating cost of producing milk/cwt.
Total labor cost/cwt.
Operator resources/cwt.
Total cost of producing milk/cwt.
Average farm price/cwt.
Related Cost Factors
Hired labor/cow
Total labor/cow
Purchased dairy feed/cow
Purchased grain & concentrate
as % of milk receipts
Vet & medicine/cow
Machinery costs/cow
Feed & crop exp./cwt.
$259
$744
$752
30%
$316
$842
$880
31%
$311
$608
$666
26%
$286
$637
$886
28%
$83
$590
$5.30
$111
$694
$5.27
$65
$460
$5.09
$115
$597
$4.83
$55,447
$38,541
$383
$2.24
$1,606
$16
$36,467
$11,883
$114
$0.57
$-24,173
$-232
$103,841
$92,893
$685
$4.15
$39,392
$290
$115,131
$92,044
$595
$2.75
$32,226
$208
Profitability Analysis
Net farm income (with appreciation)
Net farm income (without apprec.)
Net farm income per cow (w/o apprec.)
Net farm income per cwt. (w/o apprec.)
Labor & management income/operator
Labor & mgmt. income/operator/cow
Rates of return on:
Equity capital with appreciation
All capital with appreciation
65
0.7%
2.1%
-2.4%
0.0%
7.6%
7.3%
7.5%
7.1%
Farms grazing at least three months of year, changing paddock at least every three days, forage from pasture at least 30 percent, and no organic farms.
Farms with similar herd size as the 42 rotational grazing farms.
67
Top 30 percent of grazing farms by labor and management income per operator per cow.
68
Farms with similar herd size as the “Top 30%” grazing farms and labor and management incomes per operator greater than $8,000.
66
77
Table 70.
Item
SELECTED BUSINESS FACTORS BY MILKING FREQUENCY
New York State Dairy Farms, 2005 & 2006
2x/Day Milking
3x/Day Milking
2005
2006
2005
2006
Number of farms
149
157
73
76
Business Size & Production
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, lbs.
Milk plant test, % butterfat
Tillable acres, total
Hay crop, tons DM/acre
Corn silage, tons/acre
Forage DM/cow, tons
168
136
3,449,861
20,476
3.70%
438
2.7
18.2
7.9
176
144
3,598,632
20,403
3.71%
449
2.9
17.2
8.2
686
539
16,653,501
24,263
3.61%
1,306
3.7
19.0
8.4
692
555
16,987,151
24,556
3.64%
1,288
3.5
19.0
8.0
Labor & Capital Efficiency
Worker equivalent
Milk sold/worker, lbs.
Cows/worker
Farm capital/worker
Farm capital/cow
Farm capital/cwt. milk
4.42
781,248
38
$316,580
$8,305
$40.44
4.48
804,014
39
$328,284
$8,338
$40.87
15.71
1,060,395
44
$311,238
$7,119
$29.32
15.62
1,087,816
44
$336,205
$7,592
$30.92
$2.27
$4.17
$0.16
$0.10
$0.60
$0.82
$1.45
$2.24
$3.96
$0.20
$0.06
$0.60
$0.84
$1.39
$2.82
$4.08
$0.33
$0.12
$0.63
$0.73
$1.55
$2.71
$4.02
$0.31
$0.08
$0.67
$0.78
$1.58
$12.06
$3.69
$2.77
$16.43
$16.04
$-0.39
$11.71
$3.74
$2.84
$16.14
$13.93
$-2.21
$12.34
$3.17
$1.40
$15.06
$15.97
$0.91
$12.25
$3.08
$1.50
$14.99
$13.83
$-1.16
$465
$755
$885
$456
$764
$848
$683
$768
$1,070
$666
$756
$1,064
27%
$123
$642
30%
$123
$635
Milk Production Costs & Returns
Selected costs/cwt.:
Hired labor
Grain & concentrate
Purchased roughage
Replacements purchased
Veterinary & medicine
Milk marketing
Other dairy expenses
Operating costs/cwt.
Total labor costs/cwt.
Operator resources/cwt.
Total costs/cwt.
Average farm price/cwt.
Return over total costs/cwt.
Related Cost Factors
Hired labor/cow
Total labor/cow
Purchased dairy feed/cow
Purchased grain & concentrate
as % of milk receipts
Veterinary & medicine/cow
Machinery costs/cow
Profitability Analysis
Net farm income (without appreciation)
Labor & management income/operator
Rates of return on:
Equity capital with appreciation
All capital with appreciation
$87,510
$23,921
9.8%
8.4%
$30,291
$-17,967
0.1%
2.1%
26%
$154
$616
$387,427
$127,519
16.9%
12.1%
29%
$165
$612
$59,705
$-54,530
4.2%
5.0%
78
Table 71.
COMPARISON OF DAIRY FARM BUSINESS DATA BY REGION
240 New York Dairy Farms, 2006
Item
West. & Cent.
Plateau
Region
Number of farms
Western &
Central Plain
Region
Northern
New York
Central
Valleys
North. Hudson
& Southeastern
NY
44
63
34
42
57
ACCRUAL EXPENSES
Hired labor
Feed
Machinery
Livestock
Crops
Real estate
Other
Total Operating Expenses
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
Total Accrual Expenses
$72,688
147,890
59,790
97,834
26,300
24,678
56,470
$485,650
14,960
2,197
29,916
16,519
$549,242
$431,362
654,989
239,206
454,894
102,076
105,121
240,217
$2,227,865
21,236
105
109,100
81,478
$2,439,783
$190,630
356,861
117,219
252,333
51,465
53,321
120,182
$1,142,012
24,255
0
68,644
50,406
$1,285,318
$124,605
222,701
100,673
151,483
52,760
46,086
87,952
$786,261
6,466
326
49,409
25,025
$867,486
$138,584
248,472
98,616
193,070
44,333
36,869
81,002
$840,946
12,925
815
35,043
21,273
$911,002
ACCRUAL RECEIPTS
Milk sales
Livestock
Crops
Government Receipts
All other
Total Accrual Receipts
$477,809
60,938
18,937
33,571
11,034
$602,289
$2,131,837
211,594
70,680
63,149
46,170
$2,523,430
$1,121,973
131,508
26,911
30,478
20,329
$1,331,198
$767,903
66,531
14,158
39,184
17,261
$905,037
$756,154
88,088
-237
35,457
16,343
$895,805
$53,047
$94,560
$2,040
1.47
$1,388
$83,646
$201,168
$-58,071
1.70
$-34,159
$45,881
$181,685
$-43,462
1.61
$-26,995
$37,550
$88,605
$-42,021
1.78
$-23,607
$-15,197
$25,306
$-95,105
1.59
$-59,815
4.19
156
125
213
140
373
3,415,923
21,945
2.9
19.8
37
814,932
31%
$5.09
$27.16
$273
13.79
659
520
596
490
1,184
15,521,478
23,565
3.6
20.3
48
1,125,969
27%
$4.87
$33.81
$318
8.21
352
284
443
295
800
8,295,244
23,545
3.2
19.6
43
1,010,588
29%
$4.90
$21.16
$263
6.05
248
206
299
232
619
5,385,004
21,715
3.0
16.8
41
890,819
28%
$5.11
$29.89
$278
6.66
234
199
297
214
545
5,339,152
22,821
2.9
13.8
35
802,176
32%
$5.48
$35.49
$281
PROFITABILITY ANALYSIS
Net farm income(w/o appreciation)
Net farm income (w/ appreciation)
Labor & management income
Number of operators
Labor & mgmt. income/operator
BUSINESS FACTORS
Worker equivalent
Number of cows
Number of heifers
Acres of hay crops69
Acres of corn silage69
Total tillable acres
Pounds of milk sold
Pounds of milk sold/cow
Tons hay crop dry matter/acre
Tons corn silage/acre
Cows/worker
Pounds of milk sold/worker
% grain & conc. of milk receipts
Feed & crop expense/cwt. milk
Fertilizer & lime/crop acre69
Machinery cost/tillable acre69
69
Excludes farms that do not harvest forages.
79
Figure 2.
Percent Change in Milk Production, Five Regions in New York,
1996-2006
Table 72.
MILK PRODUCTION & AVERAGE COST OF PRODUCING MILK
Five Regions of New York
Item
1
Region70
3
2
Milk Production71
1996
2006
Percent change
70
2,103.6
1,971.5
-6.3%
3,123.5
3,971.0
+27.1%
2,179.7
2,418.5
+11.0%
2,682.2
2,390.0
-10.9%
1,416.5
1,294.0
-8.6%
($ per hundredweight milk)
$11.01
15.46
13.99
$11.97
14.68
13.73
$11.54
14.81
13.53
$12.17
16.34
14.26
$13.38
16.92
14.16
$1.37
$0.49
$0.50
$0.61
$-0.43
See Figure 2 for region descriptions.
Source: New York Agricultural Statistics Service, Milk-County Estimates.
72
From Dairy Farm Business Summary data.
71
5
(million pounds)
2006 Cost of Producing Milk72
Operating cost
Total cost
Average price received
Return per cwt. to operator
labor, management & capital
4
80
Table 73.
FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
22 New York Dairy-Renter Farms,73 2006
ACCRUAL EXPENSES
ACCRUAL RECEIPTS
Labor: Hired
Feed: Dairy grain & concentrate
Dairy roughage
Nondairy
Professional nutritional services
Machinery: Machinery hire, rent & lease
Machinery repairs & farm vehicle expense
Fuel, oil, grease
Livestock: Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Crops: Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Real estate: Land, building & fence repair
Taxes
Rent & lease
Other:
Insurance
Utilities (farm share)
Interest paid
Miscellaneous
TOTAL OPERATING EXPENSES
$19,057
73,916
11,676
45
0
6,364
15,239
12,095
2,660
4,949
7,406
15,919
2,083
6,628
0
3,310
2,722
2,273
2,947
7,560
4,041
2,705
131
3,078
1,498
15,574
3,899
10,138
4,620
2,538
$245,071
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
$3,613
0
12,217
1,050
$261,951
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Government receipts
Custom machine work
Gas tax refund
Other
TOTAL ACCRUAL RECEIPTS
$237,088
23,446
5,789
154
-256
12,670
2,100
198
2,579
$283,769
PROFITABILITY ANALYSIS
Net farm income (without appreciation)
Net farm income (with appreciation)
Labor & management income/farm
Number of operators
Labor & management income/operator
Rate of return on equity
capital including appreciation
$21,817
$28,411
$-2,631
1.36
$-1,935
-6.4%
BUSINESS FACTORS
Number of cows
Number of heifers
Worker equivalent
Total tillable acres
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
Milk sold per worker, lbs.
Grain & concentrate as % milk sales
Feed & crop expense/cwt. milk
Labor & machinery costs/cow
Average price/cwt. milk
88
73
2.67
222
19,726
2.4
11.3
648,285
29%
$5.77
$1,395
$13.68
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock74
Machinery & equipment74
Farm Credit stock
Other stock & certificates
Land & buildings74
Total Farm Assets
Nonfarm Assets76
Farm & Nonfarm Assets
73
Jan. 1
$4,981
20,383
727
50,619
174,995
119,113
125
25,529
34,965
$431,438
Dec. 31
$5,102
19,378
0
44,389
191,230
119,594
171
22,676
34,830
$437,368
37,539
36,252
$468,977
$473,620
LIABILITIES
Current
Intermediate75
Long term74
Total Farm Liabilities
Jan. 1
$20,891
59,611
15,036
$95,538
Dec. 31
$29,117
56,953
13,527
$99,597
Nonfarm Liabilities76
643
2,839
$96,181
$102,436
Farm Net Worth
$335,899
$337,771
Farm & Nonfarm Net Worth
$372,796
$371,184
Farm & Nonfarm Liabilities
A renter owns no farm real estate or tillable land at the end of year.
Includes discounted lease payments.
75
Includes Farm Credit stock and discounted lease payments for cattle and machinery.
76
Average of 7 farms reporting.
74
81
Table 74.
FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
Average of 24 Top Ten Percent Farms by Rate of Return on All Capital
(without appreciation), 2006
ACCRUAL EXPENSES
ACCRUAL RECEIPTS
Labor: Hired
Feed: Dairy grain & concentrate
Dairy roughage
Nondairy
Professional nutritional services
Machinery: Machinery hire, rent & lease
Machinery repairs & farm vehicle expense
Fuel, oil, grease
Livestock: Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Bedding
Milking supplies
Cattle lease & rent
Custom boarding
bST expense
Livestock professional fees
Other livestock expense
Crops: Fertilizer & lime
Seeds & plants
Spray & other crop expense
Crop professional fees
Real estate: Land, building & fence repair
Taxes
Rent & lease
Other:
Insurance
Utilities (farm share)
Interest paid
Miscellaneous
TOTAL OPERATING EXPENSES
Expansion livestock
Extraordinary expense
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
$300,079
389,470
21,766
788
903
36,313
74,913
59,068
6,585
22,825
62,398
79,651
25,478
32,184
6,073
28,263
18,160
3,736
7,314
30,150
26,588
15,977
3,931
25,251
18,569
29,906
13,545
43,862
86,352
22,467
$1,492,564
$32,096
657
72,068
47,658
$1,645,043
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Government receipts
Custom machine work
Gas tax refund
Other
TOTAL ACCRUAL RECEIPTS
$1,514,796
177,011
35,439
7,874
78,874
65,431
2,568
689
22,250
$1,904,931
PROFITABILITY ANALYSIS
Net farm income (without appreciation)
Net farm income (with appreciation)
Labor & management income/operator
Rate of return on equity
capital without appreciation
Rate of return on all
capital without appreciation
$259,888
326,558
100,668
8.4%
7.5%
BUSINESS FACTORS
Number of cows
Number of heifers
Worker equivalent
Total tillable acres
Milk sold per cow, lbs.
Hay DM per acre, tons
Corn silage per acre, tons
Milk sold per worker, lbs.
Grain & concentrate as % milk sales
Feed & crop expense/cwt. milk
Labor & machinery costs/cow
Average price/cwt. milk
483
376
10.23
975
22,586
3.8
21.2
1,067,194
27%
$4.47
$1,286
$13.88
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Farm cash, checking & savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock77
Machinery & equipment77
Farm Credit stock
Other stock & certificates
Land & buildings77
Total Farm Assets
Nonfarm Assets79
Farm & Nonfarm Assets
77
Jan. 1
$ 16,679
113,827
768
357,655
950,723
560,033
13,878
89,486
1,375,726
$3,478,773
Dec. 31
$25,671
114,821
631
386,656
1,055,070
598,420
5,830
101,036
1,524,572
$3,812,707
120,345
131,579
$3,599,118
$3,944,286
LIABILITIES
Current
Intermediate78
Long-term77
Total Farm Liabilities
Jan. 1
$235,656
544,561
579,874
$1,360,091
Dec. 31
$285,401
577,575
637,754
$1,500,729
Nonfarm Liabilities79
2,303
1,851
Farm & Nonfarm Liabilities
$1,362,394
$1,502,580
Farm Net Worth
$2,118,682
$2,311,978
Farm & Nonfarm Net Worth
$2,236,724
$2,441,706
Includes discounted lease payments.
Includes Farm Credit Stock and discounted lease payments for cattle and machinery.
79
Average of 10 farms reporting.
78
82
Table 75.
FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
Average of 240 New York Dairy Farms, 2006
ACCRUAL EXPENSES
ACCRUAL RECEIPTS
Labor: Hired
$208,284
Milk sales
$1,120,121
Feed: Dairy grain & concentrate
324,840
Dairy cattle
91,507
22,105
Dairy calves
23,438
Dairy roughage
Nondairy
113
Other livestock
2,964
Professional nutritional services
531
Crops
28,259
23,774
Government receipts
42,327
Machinery: Machinery hire, rent & lease
Machinery repairs & farm vehicle expense
60,893
Custom machine work
3,490
46,731
Gas tax refund
207
Fuel, oil, grease
Livestock: Replacement livestock
5,458
Other
20,228
Breeding
18,392
TOTAL ACCRUAL RECEIPTS
$1,332,542
Veterinary & medicine
52,698
Milk marketing
64,533
Bedding
24,154
PROFITABILITY ANALYSIS
28,610
Net farm income (without appreciation)
$41,144
Milking supplies
Cattle lease & rent
1,253
Net farm income (with appreciation)
117,452
23,518
Labor & management income/operator
-31,269
Custom boarding
bST expense
16,491
Rate of return on equity
Livestock professional fees
4,055
capital without appreciation
-1.8%
6,295
Rate of return on all
Other livestock expense
Crops: Fertilizer & lime
24,699
capital without appreciation
1.2%
Seeds & plants
18,817
Spray & other crop expense
13,482
Crop professional fees
1,671
Real estate: Land, building & fence repair
18,140
BUSINESS FACTORS
Taxes
17,033
Number of cows
350
Rent & lease
21,321
Number of heifers
283
Other:
Worker equivalent
8.19
Insurance
14,020
Total tillable acres
730
Utilities (farm share)
32,920
Milk sold per cow, lbs.
23,083
Interest paid
62,779
Hay DM per acre, tons
3.2
Miscellaneous
15,346
Corn silage per acre, tons
18.4
TOTAL OPERATING EXPENSES
$1,172,956
Milk sold per worker, lbs.
987,530
Expansion livestock
$15,954
Grain & concentrate as % milk sales
29%
Extraordinary expense
681
Feed & crop expense/cwt. milk
$5.02
Machinery depreciation
60,817
Labor & machinery costs/cow
$1,375
Building depreciation
40,989
Average price/cwt. milk
$13.85
TOTAL ACCRUAL EXPENSES
$1,291,397
-------------------------------------------------------------------------------------------------------------------------------------------------------------ASSETS
Jan. 1
Dec. 31
LIABILITIES
Jan. 1
Dec. 31
Farm cash, checking & savings
$20,172
$19,298
Accounts payable
$33,561
$50,951
Accounts receivable
86,396
82,009
Operating debt
50,484
62,706
3,413
2,042
Short-term
1,980
5,078
Prepaid expenses
Feed & supplies
261,087
251,874
Advanced gov't receipts
0
0
Dairy cows80
453,135
487,408
Current Portion:
Heifers
264,922
279,314
Intermediate
68,714
77,923
Bulls & other livestock
2,796
3,412
Long Term
19,659
22,383
Machinery & equipment80
470,515
499,365
Intermediate81
406,474
443,672
6,329
3,670
Long-term80
355,049
393,928
Farm Credit stock
Other stock & certificates
56,722
61,571
Total Farm Liabilities
$935,921 $1,056,641
1,019,780
1,103,184
Nonfarm Liabilities82
2,152
2,511
Land & buildings80
Total Farm Assets
$2,645,267
$2,793,146
Farm & Nonfarm Liabilities
$938,073 $1,059,152
Nonfarm Assets82
225,626
257,163
Farm Net Worth
$1,709,346
$1,736,505
Farm & Nonfarm Assets
$2,870,893
$3,050,309
Farm & Nonfarm Net Worth $1,932,820
$1,991,157
80
Includes discounted lease payments.
Includes Farm Credit stock and discounted lease payments for cattle and machinery.
82
Average of 117 farms reporting.
81
83
APPENDIX
PRICES, COSTS AND TRENDS
IN THE NEW YORK DAIRY INDUSTRY
84
The prices dairy farmers pay for a given quantity of goods and services has a major influence on farm production
costs. The astute manager will keep close watch on unit costs and utilize the most economical goods and services.
Table A1.
PRICES PAID BY NEW YORK FARMERS FOR SELECTED ITEMS, 1993-2006
Year
Mixed
Dairy Feed
16% Protein83
($/ton)
Fertilizer,
Urea
45-46%N83
($/ton)
Seed
Corn,
Hybrid84
($/80,000
kernels)
Diesel
Fuel83
($/gal)
Tractor
50-59 PTO84
($)
1993
171
226
72.70
0.900
19,200
1994
181
233
73.40
0.853
19,800
1995
175
316
77.10
0.850
20,100
1996
226
328
77.70
1.020
20,600
1997
216
287
83.50
0.960
21,200
1998
199
221
86.90
0.810
21,800
1999
175
180
88.10
0.750
21,900
2000
174
201
87.50
1.270
21,800
2001
176
270
92.20
1.260
22,000
2002
178
232
92.00
1.028
21,900
2003
194
283
102.00
1.516
21,300
2004
207
299
105.00
1.400
21,500
2005
190
365
111.00
2.020
23,400
2006
239
403
118.00
2.355
23,700
SOURCE: NYASS, New York Agricultural Statistics. USDA, NASS, Agricultural Prices.
83
Northeast region average. 84United States average. 85New York and New England combined.
Wage Rate
All Hired
Farm Workers85
($/hr)
6.76
6.96
6.92
7.19
7.63
7.63
8.12
8.74
8.72
9.26
9.93
9.96
9.88
10.35
Inflation, farm profitability, supply and demand all have a direct impact on the inventory values on New York dairy
farms. The table below shows year-end (December) prices paid for dairy cows (replacements), an index of these cow prices,
an index of new machinery prices (U.S. average), the average per acre value of farmland and buildings reported in January
and an index of the real estate prices.
Table A2.
VALUES AND INDICES OF NEW YORK DAIRY FARM INVENTORY ITEMS, 1990-2006
Year
Dairy Cows
Value/Head
1977=100
Machinery86
1977=100
Farm Real Estate87
Value/Acre
1977=100
1990
1,060
214
209
1,014
173
1991
1,040
210
219
1,095
187
1992
1,090
220
226
1,139
194
1993
1,100
222
235
1,237
211
1994
1,100
222
249
1,260
215
1995
1,010
204
258
1,280
218
1996
1,030
208
268
1,260
215
1997
980
198
276
1,250
213
1998
1,050
212
286
1,280
218
1999
1,250
253
294
1,340
228
2000
1,250
253
301
1,430
244
2001
1,600
323
312
1,520
259
283
320
1,610
274
2002
1,400
2003
1,300
263
325
1,700
290
2004
1,580
319
351
1,780
303
2005
1,690
341
373
1,920
327
2006
1,550
313
392
2,050
349
SOURCE: NYASS, New York Agricultural Statistics and New York Crop and Livestock Report. USDA, ASB, Agricultural
Prices.
86
United States average; 1995 - 2006 are estimated due to discontinuation of 1977=100 series.
87
New York average for 2000-2006 excludes Native American Reservation land.
85
Table A3.
NUMBER OF DAIRY FARMS AND MILK COWS BY SIZE OF HERD
New York State, 2005 88
Size of Herd
(Number of Cows)
Farms
(Number)
(Percent of Total)
(Number)
Milk Cows
(Percent of Total)
1 - 29
1,400
20.9%
13,000
2.0%
30-49
1,300
19.4%
49,000
7.5%
50-99
2,500
37.3%
165,000
25.5%
100-199
890
13.3%
120,000
18.5%
200-399
340
5.0%
82,000
12.7%
400-699
160
2.4%
88,000
13.6%
700-999
60
0.9%
51,000
7.8%
1000-1499
30
0.5%
36,000
5.6%
1500 or more
20
0.3%
44,000
6.8%
6,700
100.0%
648,000
100.0%
Total
88
This information on number of farms and number of cows by size of herd was presented by Professor George
Conneman in the “New York Economic Handbook, 2007”, EB 2006-20, and is derived from several sources:
-
Dairy Statistics as published by the New York Agricultural Statistics Services for 2005.
-
CAFO (Concentrated Animal Feeding Operations) permit reports for 2005. About 60 small CAFO farms (farms
with 200 to 700 milk cows) have not applied for or updated the permit. Estimates for these farms were made so as
to reflect the total number of dairy farms in New York State.
In 2005, there were 6,700 dairy farms in New York State, and 648,000 milk cows as reported by the NYASS.
The table above was prepared based on the NYASS data plus the CAFO permit filing for additional herd size categories.
Ninety-one percent of the farms (less than 200 cows per farm) had 54 percent of the milk cows. The remaining
nine percent of the farms had nearly 46 percent of the cows. About 1.7 percent of the farms (those with 700 or more
cows) had 20 percent of the cows. Farms with over 200 cows represented nearly 9 percent of total herds and had 46
percent of the total cows.
Farms with less than 50 cows represent 40 percent of all farms.
86
GLOSSARY AND LOCATION OF COMMON TERMS
Accounts Payable: Open accounts or bills owed to feed and supply firms, cattle dealers, veterinarians and other providers of
farm services and supplies.
Accounts Receivable: Outstanding receipts from items sold or sales proceeds not yet received such as the payment for
December milk sales received in January.
Accrual Accounting: (defined on page 9).
Accrual Expenses: (defined on page 11).
Accrual Receipts: (defined on page 11).
Annual Cash Flow Statement: (defined on page 18).
Appreciation: (defined on page 12).
Asset Turnover Ratio: (defined on page 42).
Available for Debt Service per Cow: Net cash available for debt service after deducting net personal withdrawals for family
expenditures, divided by the average number of cows.
Average Top 10% Farms: Average of 24 farms with highest rate of return on all capital (without appreciation).
Balance Sheet: A "snapshot" of the business financial position at a given point in time, usually December 31. The balance
sheet equates the value of assets to liabilities plus net worth.
Barn Types: Stanchion: cows are confined in a stall by a stanchion or neck chain. Freestall: cows move at will between
open stalls and feeding areas. Combination: both stanchion and freestall barns used.
bST Usage: An estimate of percentage of herd that was injected with bovine somatotropin during the year.
Business Records: Account Book: any organized farm record book or ledger. Accounting Service: any hired recordkeeping
service. On-Farm Computer: computerized business and financial records entered and kept on the farm. Other:
accountant, recordkeeping association or no organized recordkeeping system.
Capital Efficiency: The amount of capital invested per production unit. Relatively high investments per worker with low to
moderate investments per cow imply efficient use of capital. (See analysis, page 42).
Capital Investment: Commonly used as substitute term for farm capital or total farm assets.
Cash Flow: The movement of money in and out of the business over a given period of time, e.g. one year. (See Annual Cash
Flow Statement, page 18).
Cash Flow Coverage Ratio: (defined on page 20).
Cash From Nonfarm Capital Used in the Business: Transfers of money from nonfarm savings or investments to the farm
business where it is used to pay operating expenses, make debt payments and/or capital purchases.
Cash Paid: (defined on page 10).
Cash Receipts: (defined on page 11).
Change in Accounts Payable: (defined on page 11).
Change in Accounts Receivable: (defined under Accrual Receipts on page 11).
Change in Advanced Government Receipts: (defined under Accrual Receipts page 11).
87
Change in Inventory: (defined on page 10).
Corporation: Business is organized under state corporation law. Corporation is owned, operated, and managed by members
of one or more farm families and owner/operators are corporate employees. Corporate accounts are modified to
exclude operator wages' and other compensation from operating expenses for DFBS use.
Cost of Producing Milk, Whole Farm Method: A procedure used to calculate costs of producing milk on dairy farms
without using enterprise cost accounts. All non-milk receipts are assigned a cost equal to their sale value and
deducted from total farm expenses to determine the costs of producing milk. (see page 28).
Cost of Term Debt: A weighted average of the cost of borrowed intermediate and long term capital used on the farm.
Calculate by multiplying end of year principal of each loan that is borrowed by the interest rate for each loan at that
time. Add up each amount that is calculated for each loan and then divide by total amount of borrowed funds. Do
not include accounts payable, operating debt or advanced government receipts. This information is found on pages
8 & 9 of the data entry form.
Culling Rate: Culling rate is calculated by dividing the number of animals that left the herd for culling purposes and that
died, by the average number of milking and dry cows for the year
Current (assets and liabilities): Farm inventories and operating capital that usually turnover annually, and the debt expected
to be repaid within 12 months.
Current Portion: Principal due in the next year for intermediate and long term debt.
Current Ratio: Measures the extent to which current farm assets, if liquidated, would cover current farm liabilities.
Calculated as current farm assets at end year divided by current farm liabilities at end year.
Dairy Cash-Crop (farm): Operating and managing this farm is the full-time occupation of one or more people, cropland is
owned but crop sales exceed ten percent of accrual milk receipts.
Dairy Farm Renter: (dairy-renter) - Farm business owner/operator owns no tillable land and commonly rents all other farm
real estate.
Dairy Grain and Concentrate: All grains, protein supplements, milk substitutes, minerals and vitamins purchased and fed
to the dairy herd.
Dairy Records: DHIC: Dairy Herd Improvement Cooperative official milk production records. Owner Sampler: weights and
samples are taken by farmer but tested by DHIC. Other: all other methods used to obtain periodic production data
on individual cows. None: no milk production records on individual cows.
Dairy Roughage: All hay, silage or other fodder purchased and fed to the dairy herd.
Death Rate: The percentage of the average number of milking and dry cows that died during the year.
Debt Coverage Ratio: (defined on page 20)
Debt Per Cow: Total end-of-year debt divided by end-of-year number of cows.
Debt to Asset Ratios: (defined on page 16).
Depreciation Expense Ratio: The percentage of total accrual receipts that is charged to depreciation expense (machinery
and building).
Dry Matter: The amount or proportion of dry material that remains after all water is removed. Commonly used to measure
dry matter percent and tons of dry matter in feed.
Equity Capital: The farm operator/manager's owned capital or farm net worth.
Expansion Livestock: (defined on page 9).
88
Farm Business Chart: (see definition and application on page 44).
Farm Capital: Average total farm assets.
Farm Debt Payments as Percent of Milk Sales: Amount of milk income committed to debt repayment, calculated by
dividing planned debt payments by total milk receipts. A reliable measure of repayment ability, see pages 20 and
47.
Farm Debt Payments Per Cow: Planned or scheduled debt payments per cow represent the repayment plan scheduled at the
beginning of the year divided by the average number of cows for the year. This measure of repayment ability is
used in the Financial Analysis Chart on page 47.
Financial Lease: A long-term non-cancelable contract giving the lessee use of an asset in exchange for a series of lease
payments. The term of a financial lease usually covers a major portion of the economic life of the asset. The lease
is a substitute for purchase. The lessor retains ownership of the asset.
Hay Crop: All hay land, including new seedings, harvested once or more per year as hay or hay crop silage.
Hay Dry Matter: see Dry Matter.
Heifers: Female dairy replacements of all ages.
Hired Labor (expenses): All wages, non-wage compensation, payroll taxes, benefits, and perquisites paid employees.
Hired Labor Expense as % of Milk Sales: The percentage of the gross milk receipts that is used for labor expense. Divide
accrual hired labor expense by accrual milk sales.
Hired Labor Expense per Hired Worker Equivalent: The total cost to the farm per hired worker equivalent. Divide
accrual hired labor expense by number of hired plus family paid worker equivalents.
Income Statement: A complete and accurate account of accrual adjusted farm business receipts and expenses used to
measure net income over a period of time such as one year or one month.
Intensive Grazing: The dairy herd is on pasture at least three months of the year, changing paddocks at least every three
days and percent of forage from pasture is at least 30 percent.
Interest Expense Ratio: The percentage of total accrual receipts that is used for interest expense
Intermediate (assets and liabilities): Farm business property and associated debt that is turned over from one to ten years.
Labor and Management Income: (defined on page 13).
Labor and Management Income Per Operator: (defined on page 13).
Labor Efficiency: Production capacity and output per worker. (See analysis on pages 42 and 43).
Labor Force: Operator(s): Person or persons that run the farm and make the management decisions. An operator does not
have to be a farm owner. Family Paid: all family members, excluding operators, that are paid for working on the
farm. Family Unpaid: all family members, excluding the operators, that are not paid for farm work performed.
Liquidity: Ability of business to generate cash to make debt payments or to convert assets to cash.
Long-Term (assets and liabilities): Farm real estate and associated debt with typical life of ten or more years.
Milk Marketing (expenses): Milk hauling fees and charges, co-op dues, milk advertising and promotion expenses.
Milking Frequency: 2X/day: all cows were milked two times per day for the entire year. 3X/day: all cows were milked
three times per day for the entire year. Other: any combination of 2X, 3X, and more frequent milking.
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Milking Systems: Bucket and Carry: milk is transferred manually from milking unit to pail to tank. Dumping Station: milk
is dumped from milking unit into transfer station and then pumped to tank. Pipeline: milking units are connected
directly to milk transfer lines. Herringbone, parallel, parabone, and rotary parlors are identified specifically. Other
Parlors would include milking systems such as flat barn parlors.
Net Farm Income: (defined on page 12).
Net Farm Income from Operations Ratio: (defined on page 14)
Net Milk Income over Purchased Concentrate Per Cow: Milk receipts less milk marketing expense less purchased grain
and concentrate expense, all divided by average number of cows.
Net Milk Receipts: The mail box price received by farmers before any farmer authorized assignment or deductions.
Net Worth: The value of assets less liabilities equal net worth. It is the equity the owner has in owned assets.
Nondairy Feed: All grain, concentrates, and roughage purchased and fed to nondairy livestock.
Nonfarm Noncash Capital: (defined on page 11).
Nontillable Pasture: Permanent or semi-permanent pasture land that could not be included in a regular cropping sequence or
rotation.
Operating Costs of Producing Milk: (defined on page 31).
Operating Expense Ratio: The percentage of total accrual receipts that is used for operating expenses, excluding interest
and depreciation.
Opportunity Cost: The cost or charge made for using a resource based on its value in its most likely alternative use. The
opportunity cost of a farmer's labor and management is the value he/she would receive if employed in his/her most
qualified alternative position.
Other Forage: All forage crops harvested but not included as hay crops or corn silage, e.g. oats, barley, and sudan grass
harvested as roughage.
Other Livestock Expenses: All other dairy herd and livestock expenses not included in more specific categories. Other
livestock expenses include; bedding, DHIC, milk house and parlor supplies, livestock board, registration fees and
transfers.
Part-Time Dairy (farm): Dairy farming is the primary enterprise, cropland is owned but operating and managing this farm
is not a full-time occupation for one or more people.
Partnership: Business is owned by two or more individuals who share profits according to their contribution of labor,
management, and capital.
Percent of Heifer Inventory Custom Inventory: The percent of current heifer inventory owned by the farm that is being
custom raised off the farm.
Percent of Replacements Purchased: The percent of animals in the herd that calved for replacement purposes (not
expansion cattle) that were different genetic background than your herd and were purchased.
Personal Withdrawals and Family Expenditures Including Nonfarm Debt Payments: All the money removed from the
farm business for personal or nonfarm use including family living expenses, health and life insurance, income taxes,
nonfarm debt payments, and investments.
Premium: In milk marketing this typically refers to the amount paid for milk in addition to the minimum regulated price.
Premiums may be paid to the producer or cooperative supplier of milk by a buyer depending on a variety of criteria
such as milk quality, composition, quantity supplied, or services provided. They may also represent market
supply/demand conditions not adequately accounted for in the regulated price.
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Prepaid Expenses: (defined on page 11).
Producer Price Differential: Under Federal Order markets with multiple component pricing, it is the residual value (per
hundredweight) of the pool after deducting component payments (protein, butterfat, and other solids) to producers.
This residual value will vary between market orders and from month-to-month based on the utilization of the various
classes and class price. It is possible that the PPD can even be negative at times if, for example, the class III price
exceeds the class I price.
Profitability: The return or net income the owner/manager receives for using one or more of his or her resources in the farm
business. True "economic profit" is what remains after deducting all costs including the opportunity costs of the
owner/manager's labor, management, and equity capital.
Purchased Inputs Costs of Producing Milk: (defined on page 31).
Repayment Analysis: An evaluation of the business' ability to make planned debt payments.
Replacement Livestock: Dairy cattle and other livestock purchased to replace those that were culled or sold from the herd
during the year.
Return on Equity Capital: (defined on page 14).
Return to all Capital: (defined on page 14).
Sell Rate: The percentage of the average number of milking and dry cows that were sold for culling reasons. Animals that
were sold as replacement stock to other dairy farms is not included in this number.
Sole Proprietorship: Business is owned by one individual but there may be more than one operator.
Solvency: The extent or ability of assets to cover or pay liabilities. Debt/asset and leverage ratios are common measures of
solvency.
Specialized Dairy Farm: A farm business where dairy farming is the primary enterprise, operating and managing this farm
is a full-time occupation for one or more people and cropland is owned.
Statement of Owner Equity (reconciliation): (defined on page 17).
Taxes (expenses): Real estate taxes (school, town, and county). Payroll taxes are included as a hired labor expense. Income
and self-employment taxes are a personal expense for all noncorporate taxpayers.
Tillable Acres: All acres that are normally cropped including hayland that is pastured. Acres that are doubled cropped are
counted once.
Tillable Pasture: Hay crop acreage currently used for grazing that could be tilled in a regular cropping sequence.
Total Costs of Producing Milk: (defined on page 31).
Value of Calf Sold: The average value received for bull and heifer calves sold as calves during the year.
Value of Cow Sold: The average value received for animals that were sold for culling reasons.
Whole Farm Method: A procedure used to calculate costs of producing milk on dairy farms without using enterprise cost
accounts. All non-milk receipts are assigned a cost equal to their sale value and deducted from total farm expenses
to determine the costs of producing milk.
Worker Equivalent: The number of full-time workers equivalent to all the full and part-time people working throughout the
year. Operator and family labor is included. Worker equivalents are determined by converting all work to full-time
months (based on a 230 hours per month) and dividing by 12.
Working Capital: A theoretical measure of the amount of funds available to purchase inputs and inventory items after the
sale of current farm assets and payment of all current farm liabilities. Calculated as current farm assets at end year
less current farm liabilities at end year.